THE  CITIZEN'S  LIBRARY 

OF 

ECONOMICS,   POLITICS,   AND 
SOCIOLOGY 

EDITED  BY 
RICHARD  T.  ELY,  PH.D.,  LL.D. 

PROFESSOR  OF   POLITICAL  ECONOMY, 
UNIVERSITY  OF   WISCONSIN 


THE  ECONOMICS  OF 
AGRICULTURE 


THE  CITIZEN'S  LIBRARY  OF 
ECONOMICS,    POLITICS,    AND    SOCIOLOGY 

Edited  by  Richard  T.  Ely,  Ph.D.,  LL.D. 
Half  Leather  12mo  $1.25  net  each 

AMERICAN  CITY,  THE.  A  Problem  in  Democracy.  By  D.  F. 
Wilcox. 

AMERICAN  MUNICIPAL  PROGRESS.  Chapters  in  Municipal 
Sociology.  By  C.  Zueblin. 

CHILD  PROBLEMS.     By  George  B.  Mangold.    Preparing. 

COLONIAL  ADMINISTRATION.     By  Paul  S.  Reinsch. 

COLONIAL  GOVERNMENT.    By  P.  S.  Reinsch. 

CUSTOM  AND  COMPETITION.     By  R.  T.  Ely.     Preparing. 

DEMOCRACY  AND  SOCIAL  ETHICS.     By  Jane  Addams. 

ECONOMIC  CRISES.    By  E.  D.  Jones. 

ECONOMICS  OF  DISTRIBUTION.    By  J.  A.  Hobson. 

EDUCATIONAL  AND  INDUSTRIAL  EVOLUTION.  By  Frank 
Tracy  Carlton. 

ELEMENTS  OF  SOCIOLOGY.    By  F.  W.  Blackmar. 

ESSAYS  IN  THE  MONETARY  HISTORY  OF  THE  UNITED 
STATES.  By  C.  J.  Bullock. 

FOUNDATIONS  OF  SOCIOLOGY.     By  E.  A.  Ross. 

GOVERNMENT  IN  SWITZERLAND.     By  J.  M.  Vincent. 

GREAT  CITIES  IN  AMERICA.  Their  Problems  and  their  Govern- 
ment. By  D.  F.  Wllcox.  Preparing. 

HISTORY  OF  POLITICAL  PARTIES  IN  THE  UNITED  STATES. 
By  J.  Macy. 

INTERNATIONAL  COMMERCIAL  POLICIES.    By  G.  M.  Fisk. 

INTRODUCTION  TO  BUSINESS  ORGANIZATION.  By  S.  E. 
Sparling. 

INTRODUCTION  TO  THE  STUDY  OF  AGRICULTURAL  ECO- 
NOMICS. By  H.  C.  Taylor. 

IRRIGATION  INSTITUTIONS.  A  Discussion  of  the  Growth  of  Ir- 
rigated Agriculture  in  the  Arid  West.  By  E.  Mead. 

MONEY.  A  Study  of  the  Theory  of  the  Medium  of  Exchange. 
By  David  Kinley. 

MONOPOLIES  AND  TRUSTS.     By  R.  T.  Ely. 

MUNICIPAL  ENGINEERING  AND  SANITATION.    By  M.  N.  Baker. 

NEWER  IDEALS  OF  PEACE.     By  Jane  Addams. 

PRINCIPLES  OF  ANTHROPOLOGY  AND  SOCIOLOGY,  THE.  In 
their  relations  to  Criminal  Procedure.  By  M.  Parmelee. 

RAILWAY  LEGISLATION  IN  THE  UNITED  STATES.  By  B.  H. 
Meyer. 

SOCIAL  CONTROL.  A  Survey  of  the  Foundation  of  Order.  By 
E.  A.  Ross. 

SOME  ETHICAL  GAINS  THROUGH  LEGISLATION.  By  Mrs. 
Florence  Kelley. 

SPIRIT  OF  AMERICAN  GOVERNMENT.    By  J.  A.  Smith. 

STUDIES  IN  THE  EVOLUTION  OF  INDUSTRIAL  SOCIETY. 
By  R.  T.  Ely. 

SURVEY  OF  SOCIOLOGY.    By  E.  Vincent.     Preparing. 

WAGE-EARNING  WOMEN.    By  Annie  Marion  MacLean. 

WORLD  POLITICS.    By  P.  S.  Reinsch. 

THE  MACMILLAN  COMPANY 
64-66  Fifth  Avenue,         New  York 


THE    CITIZEN'S    LIBRARY 


AN  INTRODUCTION  TO  THE 
STUDY  OF 


Agricultural  Economics 


BY 

HENRY  C.  TAYLOR,  M.S.AcR.,  PH.D. 
\\ 

PROFESSOR  OF  AGRICULTURAL  ECONOMICS  IN  THE  UNIVERSITY  or  WISCONSIN 
COLLEGE  OF  AGRICULTURE 


THE  MACMILLAN   COMPANY 

LONDON:  MACMILLAN  &  CO.,  LTD. 
1912 

All  rights  reserved 


• 


COPYRIGHT,  1905, 
BY  THE  MACMILLAN  COMPANY. 


Set  up  and  electrotyped.      Printed  September,  1905.      Reprinted 
January,  1909;   December,  1910;  October,  1912. 


Berwick  &  Smith  Co.,  Norwood,  Mass.,  U.S.A. 


Co  tfie 

OF   MY   FATHER 

TARPLEY  E.  TAYLOR 

WHOSE   SUCCESS  AS  A  FARMER,   AND  WHOSE 

GENEROSITY  AS  A  FATHER,    MADE 

POSSIBLE  THE  YEARS   OF  STUDY  WHICH 

WERE    PREREQUISITE     TO    THE    PREPARATION 

OF  THIS  BOOK 


254510 


CONTENTS 

CHAPTER  VAGI 

I.    INTRODUCTION            ....  3 

II.    THE  FACTORS  OF  AGRICULTURAL  PRODUCTION  9 

Section      I.     Land            .            .  II 

Section    II.     Capital-Goods         .            .  17 

Section  III.     Population              .           .  20 

III.  THE  ECONOMIC  PROPERTIES  OF  THE  FACTORS 

OF  PRODUCTION          ....         24 
Section      I.     Land  ...         24 

Section    II.     Capital-Goods         .  .          29 

Section  III.     Labor  •.  .  .          33 

IV.  THE  GUIDING  PRINCIPLE  IN  THE  ORGANIZATION 
OF  THE  FARM  .  .  39 

V.    THE  ORGANIZATION  OF  THE  FARM   .  .         59 

Section      I .     The  Selection  of  Land  and  Capi- 
tal-Goods, or  the  Grades  of  the 
Factors  of  Production  which 
should  be  Brought  Together      59 
Section    II.     The  Selection  of  Crops  and  the 
Organization    of     the    Field- 
System        .  .  65 
Section  III.     The  Place  of  Animal  Husband- 
ry   in    the    Economy    of    the 
Farm            .            .  77 
VI.    THE  ORGANIZATION  OF  THE  FARM,  CONTINUED; 
THE  PROPORTIONS  IN  WHICH  THE  FACTORS  OF 
PRODUCTION  SHOULD  BE  BROUGHT  TOGETHER, 
WITH  ESPECIAL  REFERENCE  TO  INTENSITY  OF 
CULTURE         ..... 

j/'     VII.    THE  SIZE  OF  FARMS   .  .  .  "7 

Section  I.  The  Economic  Principles 
which  Determine  the  Size  of 
Farms  .  .  .117 

Section    II.    The  Size  of  Farms  in  Various 

Countries    .  .  .        128 

vii 


CONTENTS 


CHAPTER 

VIII. 


IX. 


XI. 


XII. 


XIII 


PAGE 

THE  FORCES  AND  CONDITIONS  WHICH  DETER- 
MINE THE  PRICES  OF  AGRICULTURAL  PRODUCTS  136 
THE  DISTRIBUTION   OF    WEALTH,  WITH    ES- 
PECIAL REFERENCE  TO  THE   RENT    OF    FARM 
LAND  AND  TO  THE  CONDITIONS  WHICH  ENABLE 
FARMERS  TO  SAVE  FROM  THEIR  EARNINGS         152 
THE  PRINCIPLES  TO  BE  FOLLOWED   IN   ESTI- 
MATING  THE    VALUE    OF    FARM    LAND    AND 
EQUIPMENTS   .....        185 
THE  FARMER'S  MEANS  OF  ACQUIRING  LAND      198 
Section      I.     Free  Land  .  .  .        198 

Section    II.     Gift  and  Inheritance  .        209 

Section  III.     Savings        .  .  .        215 

Section  IV.     Credit  .  .  .218 

Section    V.     The  Taxation  of  Mortgages      224 
Section  VI.     The  Need  of  a  System  for  Ob- 
taining  Credit  on    Land,   the 
District  Credit  Associations  in 
Germany     .  .  .        226 

TENANCY  AND  LANDOWNERSHIP  IN  THE  UNITED 


STATES 
Section 


235 


I, 


The  Decline  in  the  Percentage 
of  Landowning  Farmers   .        237 
Land  Values  and  Landowner- 
ship  .  .  .        244 
Landownership    and  Tenancy 
Among  the  Negroes          .        250 
The     Ownership     of     Rented 
Farms          .            .  .        257 
The  Relations  Between  Land- 
lords and  Tenants  in  the  United 
States          .            .            .260 
THE  ADJUSTMENT  OF  THE  RELATIONS  BETWEEN 
LANDLORDS  AND  TENANTS  IN  ENGLAND      .        286 


Section    II. 


Section  III. 


Section  IV. 


Section    V. 


Vlll 


AGRICULTURAL  ECONOMICS 


CHAPTER  I 

INTRODUCTION 

The  subject  matter  of  Economics,  or  Political 
Economy,  is  found  in  the  relations  arising  among 
men  in  their  efforts  to  gain  a  livelihood,  and 
in  the  relations  between  man  and  the  physical 
universe  consequent  upon  these  efforts.  Eco- 
nomics deals  primarily  with  human  relations  aris- 
ing under  certain  conditions ;  for  example,  wages, 
rent,  interest,  and  taxes,  all  rest  upon  such  rela- 
tions. But  in  order  to  make  a  living  man  must 
shape  Nature  to  his  purposes ;  therefore  we  must 
examine  into  the  given  conditions  under  which 
men  come  into  contact  with  each  other  and  with 
Nature  in  their  efforts  to  secure  the  necessaries, 
conveniences,  and  luxuries  of  life. 

While  she  has  provided  abundant  opportunities 
for  producing  the  means  of  satisfying  human 
wants,  Nature  has  decreed  that  man  must  work, 
— "In  the  sweat  of  thy  face  shalt  thou  eat  bread."1 
Or  to  give  Virgil's  version  of  the  same  law, 

The  sire  of  all,  great  Jove  himself  decreed 

No  works  save  those  that  task  us  should  succeed.* 

Since  it  is  by  work  that  the  wants  of  men  are  sat- 
isfied, it  is  of  general  interest  that  this  work  shall 

1  Genesis,  Chapter  III,  verse  19. 
1  The  Georgics  of  Virgil,  Book  L 


AGRICULTURAL    ECONOMICS 

be  so  directed  as  to  yield  the  largest  possible  re- 
turns in  human  satisfaction.  Viewed  from  this 
standpoint  it  may  be  said  that  economics  includes 
a  treatment  of  "the  economy  of  energy  required 
for  the  satisfaction  of  human  needs."1  It  is  de- 
sirable that  the  energy  required  for  the  satisfac- 
tion of  human  wants  be  used  most  economically, 
not  that  men  may  work  less  strenuously,  but  that 
they  may  live  more  abundantly. 

The  economics  of  any  particular  industry,  as 
agriculture,  treats  of  the  principles  which  should 
guide  those  engaged  in  that  industry  in  the  expend- 
iture of  energy  in  the  production  of  economic 
goods,  and  also  of  those  institutions  which  are 
necessary  to  impel  the  promoters  of  that  industry 
to  do  that  which  best  conserves  the  interests  of  so- 
ciety as  a  whole. 

Agriculture  is  often  spoken  of  as  the  most  inde- 
pendent of  all  occupations,  and  it  is  true  that  the 
farmer  is  less  dependent  upon  his  fellow  men  than 
is  his  city  brother.  But  while  it  is  true  that  the 
farmer  is  brought  into  contact  with  other  men  less 
frequently  than  is  the  merchant  or  the  manufac- 
turer, yet,  on  the  other  hand,  he  is  brought  into 
closer  contact  with  Nature.  The  manufacturer, 
for  example,  may  know  each  evening  what  tasks 
are  to  engage  his  attention  the  next  day,  but  the 
farmer  simply  knows  what  he  would  like  to  do, 
and  awaits  the  dictations  of  the  weather.  So- 

JP.  Kropotkin,  Fields,  Factories  and  Workshops,  p.  iv. 

4 


INTRODUCTION 

daily  considered,  the  farmer  may  be  more  inde- 
pendent than  the  man  of  the  city,  but  he  is  cer- 
tainly more  directly  dependent  upon  the  condi- 
tions set  by  his  physical  environment. 

But  while  the  farmer  may  be  more  directly 
dependent  upon  Nature  than  are  those  engaged  in 
the  industries  of  the  city,  he  is  by  no  means  inde- 
pendent of  his  fellow  men.  The  pioneer  farmer 
who  looked  primarily  to  the  satisfaction  of  the 
wants  of  his  own  household  may  have  selected 
the  crops  which  he  cultivated,  without  giving 
any  thought  to  the  needs  of  other  men;  but  the 
modern  agriculturist,  who  produces  primarily  for 
the  market,  and  procures  upon  the  market  a  large 
share  of  the  necessaries,  conveniences,  and  luxuries 
of  life,  is  bound  to  take  into  account  the  demands 
of  his  fellow  beings.  The  modern  farmer  must 
consider  the  price  for  which  the  produce  can  be 
sold  as  well  as  the  conditions  of  production,  if 
he  would  manage  his  farm  successfully. 

This  close  dependence  of  the  farmer  upon 
physical  and  social  conditions  which  are  subject 
to  variation  from  year  to  year,  makes  it  impos- 
sible for  him  to  manage  his  work  by  rule  of 
thumb.  He  must  follow  general  principles  rather 
than  specific  rules.  He  is  ever  being  required 
to  adjust  himself  to  new  commercial  conditions, 
and  demands  are  being  made  upon  his  judgment 
many  times  in  the  course  of  each 'day's  work,  as 
he  tries  to  adjust  his  farm  operations  to  the  vary- 

5 


AGRICULTURAL    ECONOMICS 

ing  conditions  of  soil  and  climate.  It  is  neces- 
sary that  the  farmer  be  ever  alert.  "It  is  a  max- 
im universally  agreed  upon  in  agriculture,"  says 
Pliny,  "that  nothing  must  be  done  too  late;  and 
again,  that  everything  must  be  done  at  its  proper 
season;  while  there  is  a  third  precept,  which  re- 
minds us  that  opportunities  lost  can  never  be 
regained."1  It  is  of  exceedingly  great  impor- 
tance that  the  farmer  have  in  mind  some  guiding 
principles  which,  like  the  compass,  will  enable 
him  to  direct  his  actions  in  accordance  writh  a 
definite  purpose. 

There  remains  that  class  until  this  day  who  fail 
to  recognize  the  presence  of  natural  laws,  and 
who  attribute  the  unusual  success  of  the  men  of 
extraordinary  ability  to  dishonesty  or  to  foul 
play  of  some  sort,  while  to  "bad  luck"  they 
ascribe  the  results  of  their  own  laziness.  These 
men  who  talk  of  "luck,"  and  who  are  not  willing 
to  attribute  to  brain  and  brawn  the  success  of 
their  neighbors,  may  well  draw  a  lesson  from  the 
following  story  related  by  the  ancient  writer, 
Pliny:  "C.  Furius  Chresimus,  a  freedman,  hav- 
ing found  himself  able,  from  a  very  small  piece  of 
land,  to  raise  far  more  abundant  harvests  than  his 
neighbors  could  from  the  largest  farms,  became 
the  object  of  very  considerable  jealousy  among 
them,  and  was  accordingly  accused  of  enticing 

1  Natural  History,  Book  XVIII,  Chapter  8,  Bohn's  edition, 
Vol  IV,  p.  18. 

6 


INTRODUCTION 

away  the  crops  of  others  by  the  practise  of 
sorcery.  Upon  this,  a  day  was  named  by 
Spurius  Calvinus,  the  curule  aedile,  for  his 
appearance.  Apprehensive  of  being  condemned, 
when  the  question  came  to  be  put  to  the 
vote  among  the  tribes,  he  had  all  his  implements 
of  husbandry  brought  into  the  Forum,  together 
with  his  farm  servants,  robust,  well-conditioned, 
and  well-clad  people,  Piso  says.  The  iron  tools 
were  of  first-rate  quality,  the  mattocks  were  stout 
and  strong,  the  plow-shares  ponderous  and  sub- 
stantial, and  the  oxen  sleek  and  in  prime  condi- 
tion. When  all  this  had  been  done,  'Here, 
Roman  citizens/  said  he,  'are  my  implements 
of  magic;  but  it  is  impossible  for  me  to  exhibit 
to  your  view,  or  to  bring  into  this  Forum,  those 
midnight  toils  of  mine,  those  early  watchings, 
those  sweats,  and  those  fatigues/  Upon  this,  by 
the  unanimous  voice  of  the  people,  he  was  imme- 
diately acquitted."1 

The  element  of  uncertainty  should  not  be 
underrated,  for  this  is  one  of  the  characteristics 
of  the  agricultural  industry,  and  yet  it  should  be 
remembered  that  as  a  rule  the  chance  element  is 
more  or  less  equally  great  in  a  given  community, 
and  at  a  given  time,  for  all  who  are  equally  intel- 
ligent and  energetic.  The  more  rational  farmers 
are  usually  willing  to  admit  that  the  unusual  de- 

lThe  Natural  History  of  Pliny,  Book  XVIII,  Chapter  8. 
Taken  from  the  translation  of  Bostock  and  Riley,  Bohn's 
Classical  Library,  Vol.  IV,  p.  17. 

7 


AGRICULTURAL    ECONOMICS 

gree  of  success  attained  by  one  of  their  number  is 
the  result  of  hard  work,  clear  thinking,  and  skil- 
ful management.  These  more  intelligent  farm- 
ers are  coming  to  recognize  that  there  are  funda- 
mental economic  principles  which,  when  carefully 
followed,  lead  the  way  to  success  in  agricultural 
production.  The  setting  forth  of  such  princi- 
ples is  one  of  the  aims  of  this  book. 

The  development  of  commercial  agriculture  has 
brought  the  tillers  of  the  soil  into  close  economic 
relations  with  those  engaged  in  other  industries. 
The  farmer  has  become  dependent  upon  the 
manufacturer,  the  merchant,  and  the  commercial 
carrier.  But  besides  the  relations  which  arise 
when  the  products  of  the  country  are  exchanged 
for  those  of  the  city,  should  be  mentioned  those 
which  are  involved  whenever  labor  is  employed, 
and  whenever  the  use  of  land  is  acquired  either  by 
lease  or  by  purchase.  These  various  relations 
often  result  in  conflicting  interests  which  must  be 
adjusted  by  public  authority  in  accordance  with 
some  generally  accepted  principle.  Hence  it  has 
come  about  that  these  economic  relations  have 
their  legal  side.  So  to  analyze  the  conditions  of 
agricultural  production  that  those  who  make  the 
laws,  which  are  intended  to  adjust  the  economic 
relations  of  those  engaged  in  this  industry,  may 
act  intelligently,  is,  therefore,  another  purpose 
which  has  been  held  in  mind  in  the  preparation  of 
this  work. 

8 


CHAPTER  II 

THE  FACTORS  OF  AGRICULTURAL  PRODUCTION 

.While  the  natural  agents,  heat,  light,  air, 
moisture,  and  the  soil,  are  all  essential  to  agricul- 
tural production,  the  farmer  usually  acquires 
the  use  of  all  these  when  he  buys  or  rents  land, 
and  for  this  reason  economists  have  commonly 
included  all  these  natural  agents  under  the  one 
term  land.  Horses  and  other  live  stock,  tools 
and  machinery,  buildings,  and  general  farm  sup- 
plies are  also  essential  to  modern  agricultural  pro- 
duction. These,  so  far  as  they  are  used  for  pro- 
ductive purposes,  are  classed  together  as  capital- 
goods.  The  term  capital  has  been  used  by  econo- 
mists in  the  sense  in  which  we  here  use  the  term 
capital-goods,  but  it  often  happens  that  these 
writers  have  in  mind  the  money  value  of  certain 
instruments  of  production  rather  than  the  con- 
crete things  such  as  horses,  cattle,  sheep,  and  hogs, 
or  barns,  plows,  harrows,  drills,  and  reapers,  or 
hay,  grain,  and  fodder  which  are  fed  to  productive 
animals.  The  farmer  deals  with  concrete  things. 
As  the  term  land  is  used  to  designate  something 
concrete,  so  the  term  capital-goods  will  be  used 
in  this  book  to  designate  certain  other  concrete 

9 


AGRICULTURAL    ECONOMICS 

things.  The  term  capital  will  be  used  at  times  to 
designate  the  money  value  of  capital-goods. 

In  order  that  the  land  and  the  capital-goods 
shall  be  most  productive  it  is  necessary  that  man 
should  do  his  part.  The  work  required  for  this, 
whether  intellectual  or  physical,  and  whether  per- 
formed by  the  farmer  himself  or  by  hired  men, 
is,  in  most  economic  literature  designated  by  the 
term  labor. 

The  activities  of  man  as  a  factor  in  agricul- 
tural production  may  be  divided  into  two  classes : 
first,  management,  which  includes  that  activity 
which  is  requisite  to  the  planning  and  supervision 
of  the  operations  of  the  farm;  and,  second,  the 
performance  of  certain  tasks,  such  as  plowing, 
sowing,  harrowing,  etc.,  as  directed  by  the  man- 
ager. The  latter  is  usually  called  "labor,"  which 
is  the  narrower  and  more  common  use  of  this 
term.  Both  of  these  functions,  labor  and  man- 
agement, are  commonly  performed  by  farmers  in 
this  country,  although  to  hire  laborers  to  per- 
form many  of  the  operations  of  the  farm  is  also 
common.  For  many  purposes  it  seems  more 
convenient  to  follow  the  practise  of  using  the 
term  labor  in  its  inclusive  sense,  and  yet  for  cer- 
tain purposes  of  analysis  it  is  necessary  to  make 
the  distinction  between  labor  in  this  narrower 
sense  and  management 

These  three,  land,  capital-goods,  and  labor,  or 
man  as  a  manager  and  as  a  laborer,  are  called  the 

10 


FACTORS    OF    PRODUCTION 

factors  of  production.  These  factors  being  the 
basis  of  agricultural  production,  we  shall  first 
consider  the  abundance  and  economic  character 
of  the  land  and  the  capital-goods  employed  in  ag- 
riculture, and  the  number  and  economic  character 
of  the  men  engaged  in  this  industry,  in  the  United 
States,  and  then  attempt  to  lay  down  the  princi- 
ples in  accordance  with  which  these  factors  should 
be  organized. 

Section  I.  Land.  —  The  land  area  of  the 
United  States,  exclusive  of  Alaska  and  the  insular 
possessions,  was  given,  in  1900,  as  2,970,230 
square  miles,  or  1,900,947,200  acres.  The  acre- 
age in  fan^^^^given,  as  838,591,774,  which  is 

about  forf^J  KK" I )  Per  cent  °^  ^e  tota^  ^anc* 
surface  oi^|  Bfuntry.1  Of  the  total  area  in- 
cluded in  farms,  however,  only  about  half  (414,- 
498,487  acres,  or  49.4  per  cent.)  is  given  as  im- 
proved land.2  Hence  only  about  twenty-two  per 
cent.  (21.8)  of  the  land  area  of  the  United  States 
is  improved  farm  land.  It  is  interesting  and 
helpful  to  compare  the  United  States  with  some 
of  the  European  countries  in  this  regard.  In 
England  seventy-six  per  cent,  of  the  total  area  is 

1  Twelfth    Census    of   the   United    States,    Statistical  Atlas, 
pp.  25  and  70. 

2  Under  the  total  area  in  farms  is  included  "all  outlying  or 
separate   meadows,   pastures,   woodlots,   marshes,   etc."  Under 
"unimproved  land"  is  included  all  "land  which  has  never  been 
plowed,   mowed,   or   cropped,   including   land   once   cultivated 
but  now  grown  up  to  trees  and  shrubs."     Under  "Improved 
land"    is    "included    all    land    not    reported    as    unimproved." 
(Twelfth  Census  of  the  United  States,  Vol.  V,  p.  758.) 

II 


AGRICULTURAL    ECONOMICS 

given  (1900)  as  the  improved  area  of  farms.1 
In  Germany,  eighty  per  cent,  of  the  total  area  is 
included  in  farms  (1895)  ;  but  only  three- fourths 
of  the  total  farm  area  is  counted  as  improved 
land.  Hence  about  sixty  per  cent,  only  of  the 
total  area  of  Germany  is  improved  farm  land.2 
These  figures  indicate  that  the  land  of  the  United 
States  has  not  been  nearly  so  completely  brought 
under  cultivation  as  has  that  of  the  older  coun- 
tries. Yet  there  is  sixteen  times  as  much  im- 
proved farm  land  in  the  United  States  as  there  is 
in  England,  and  five  times  as  much  as  in  Ger- 
many. 

The  above  figures  for  the  United  States  as  a 
whole  do  not  fairly  represent  the  extent  to  which 
the  land  of  this  country  has  been  utilized.  In  the 
state  of  Illinois  ninety-one  per  cent,  of  the  total 
area  is  included  in  farms,  and  eighty-four  and 
one-half  per  cent,  of  the  area  in  farms  is  im- 
proved, so  that  nearly  seventy-six  per  cent,  of  the 
total  area  of  the  state  is  improved  farm  land. 
In  Iowa  the  proportion  of  improved  land  is  even 

*By  "improved  area"  is  meant  the  acreage  under  "crops, 
bare  fallow,  or  grass,"  "the  rough  grazings  attached  to  many 
farms  in  hilly  districts"  not  being  included.  The  total  "im- 
proved area"  of  farm  land  in  England  was  24,713,790  acres. 
(See  the  Agricultural  Returns,  published  annually  by  the 
Board  of  Agriculture.) 

2  Land  used  as  cultivated  fields,  gardens,  meadows,  rich 
pastures,  orchards,  and  vineyards  are  counted  as  improved 
land,  in  the  German  reports.  The  total  improved  area  in 
farms  in  Germany  was  80,451,632  acres,  in  1895.  (SeeStatis- 
tik  des  Deutschen  Reichs  (1895).  Neue  Folge  112,  p.  21*) 

12 


FACTORS    OF    PRODUCTION 

larger.  Ninety-five  and  eight-tenths  per  cent,  of 
the  total  area  of  that  state  is  farm  land,  and  of 
that  in  farms  eighty-six  and  one-half  per  cent,  is 
improved,  so  that  eighty-three  per  cent,  of  the 
total  area  of  the  state  is  improved  farm  land.  In 
Wisconsin  the  situation  is  quite  different.  Only 
fifty-five  and  five-tenths  per  cent,  of  the  total  area 
is  there  included  in  farms,  and  only  fifty-six  and 
six-tenths  per  cent,  of  that  is  improved,  so  that 
only  thirty-one  and  four-tenths  per  cent,  of  the 
total  area  of  the  state  is  improved  farm  land. 
It  is  well  known  that  this  low  percentage  of  im- 
proved land  in  Wisconsin  is  due  to  the  vast  areas 
of  unoccupied  land  in  the  northern  part  of  the 
state.  The  figures  for  New  Mexico  will  help  one 
to  understand  why  the  percentage  of  improved 
land  for  the  United  States  as  a  whole  is  so  low  in 
spite  of  the  fact  that  some  states  surpass  the 
densely  populated  European  countries  in  the  per- 
centage of  their  improved  land.  In  1900,  only 
five  and  nine-tenths  per  cent,  of  the  total  area  of 
New  Mexico  was  in  farms,  and  only  six  and  four- 
tenths  per  cent,  of  that  was  improved.  Thus  the 
improved  area  was  only  thirty-eight-hundredths 
of  one  per  cent,  of  the  total  area. 

Of  the  territorial  divisions  of  the  United  States, 
the  North  Central  States  form  by  far  the  most 
important  agricultural  region.  While  these 
states  contain  only  about  one-fourth  of  the  total 
area,  they  contain  more  than  one-half  of  the  im- 

13 


AGRICULTURAL    ECONOMICS 

proved  land  of  the  United  States  (1900),  and,  in 
1903,  they  produced  over  two-thirds  of  our  maize, 
wheat,  and  barley  crops  and  nearly  three-fourths 
of  our  oat  crop. 

It  is  true  that  vast  areas  of  the  unimproved 
land  of  this  country  are  not  capable  of  being 
brought  under  cultivation,  yet  there  is  certainly  a 
much  greater  opportunity  for  agricultural  expan- 
sion here  than  in  Europe.  It  would  be  interest- 
ing to  know  what  share  of  the  unimproved  areas 
of  the  United  States  might  be  cultivated.  It  is 
certainly  true  that  much  of  the  land  included  in 
the  "unimproved  area"  of  farms  might  be  plowed 
or  mowed  if  this  form  of  treatment  would  bring 
larger  net  returns  to  the  farmer  than  he  can  ob- 
tain in  other  ways.  Our  rich  pasture  lands, 
which  produce  an  enormous  amount  of  wealth 
each  year  with  a  minimum  expenditure  of  labor, 
are  included  under  the  head  of  unimproved  land. 
The  area  which  is  not  included  in  farms  consists. 
in  part,  of  timber  lands  which  form  the  basis  of 
the  lumber  industry,  and,  in  part,  of  valuable 
grazing  lands  which  supplement  the  farms  in  the 
production  of  meat  and  wool. 

Irrigation  is  proving  an  important  means  of 
extending  agriculture  in  the  arid  regions.  To 
quote  Professor  Elwood  Mead :  "The  uninhab- 
ited and  mismanaged  areas  of  the  arid  region  are 
full  of  opportunities.  A  realization  of  the  possi- 
bilities of  this  region  and  of  what  man  can  accom- 

14 


FACTORS    OF    PRODUCTION 

plish  by  a  right  use  of  its  resources  has  been  of 
slow  growth.  To  the  early  fur  traders  and  ex- 
plorers the  arid  region  was  a  dreary,  worthless 
waste.  To  neither  Bonneville,  Fremont,  nor  any 
of  the  multitude  who  crossed  its  vast  expanse  to 
reach  the  golden  rivers  of  California  was  there 
given  any  prophetic  vision  of  the  magic  to  be 
wrought  by  irrigation.  Nor  is  this  surprising. 
It  is  difficult  to  imagine  anything  less  attractive 
than  the  stretches  of  barren  sand  broken  only  by 
the  isolated  yuccas  of  the  Mojave  Desert,  or  any- 
thing more  dreary  than  the  crucifixion  thorn  of 
Arizona,  Only  in  localities  where  the  work  of 
reclamation  has  been  in  progress  long  enough  to 
permit  the  growth  of  trees,  flowers,  and  shrubs, 
can  the  possibilities  of  the  soil  and  climate  be  ap- 
preciated. No  greater  contrast  can  be  found 
anywhere  than  is  afforded  by  a  comparison  of  the 
desert  above  the  ditches  and  the  cultivated  fields 
below  them.  .  .  .  The  arid  West  is  the  nation's 
farm.  It  contains  all  that  is  left  of  the  public 
domain,  and  is  the  chief  hope  of  those  who  dream 
of  enjoying  landed  independence,  but  who  have 
little  beside  industry  and  self-denial  with  which 
to  secure  it.  As  it  is  now,  this  land  has  little 
value.  This  is  not  because  the  land  lacks  fertil- 
ity, but  because  it  lacks  moisture.  Where  rivers 
have  been  turned  from  their  courses,  the  products 
which  have  resulted  equal  in  excellence  and 
amount  those  of  the  most  favored  district  of  am- 
is 


AGRICULTURAL    ECONOMICS 

pie  rainfall."  And  yet,  with  respect  to  the  pro- 
portion of  these  arid  regions  which  may  be  made 
productive,  the  same  authority  gives  the  follow- 
ing rather  discouraging  estimate :  "If  every  drop 
of  water  which  falls  on  the  mountain  summits 
could  be  utilized,  it  is  not  likely  that  more -than 
ten  per  cent,  of  the  total  area  of  the  arid  West 
could  be  irrigated,  and  it  is  certain  that,  because 
of  physical  obstacles,  it  will  never  be  possible  to 
get  water  to  even  this  small  percentage/'1 

The  introduction  of  new  varieties  of  grains 
and  forage  crops  which  are  suited  to  semi-arid 
regions  makes  possible  the  extension  of  agricul- 
ture where  the  rainfall  is  too  light  for  the  crops 
which  are  commonly  grown  in  the  humid  regions. 
For  example,  the  drought-resisting  macaroni 
wheats  have  recently  been  introduced  with  great 
profit.  "In  many  places  west  of  the  looth  mer- 
idian, where  wheat  growing  with  other  varieties 
is  practically  impossible  on  account  of  drought, 
the  eastern  Russian  varieties  by  virtue  of  their 
extreme  drought-resisting  qualities  will  produce, 
ordinarily,  a  crop  of  from  twelve  to  twenty 
bushels  per  acre.  By  the  use  of  these  wheats, 
therefore,  these  localities  may  become  important 
additions  to  the  wheat  area."2 

The  growth  of  our  population  is  sure  to  make 
increasing  demands  upon  the  agricultural  re- 

1  Irrigation  Institutions,  pp.  2,  3,  and  5. 

2  United  States  Department  of  Agriculture,  Bureau  of  Plant 
Industry,  Bulletin,  No.  3,  p.  28. 

16 


FACTORS    OF    PRODUCTION 

sources  of  the  country,  a  part  of  which  may  be 
met  by  extending  the  industry  into  regions  which 
are  not  being  used ;  but  the  most  important  means 
of  increasing  the  supply  of  agricultural  products 
in  the  future  will  doubtless  be  by  farming  more 
intensively  the  land  which  is  already  in  use.  This 
means  that  the  part  which  labor  and  capital-goods 
play  in  agricultural  production  will  be  more  im- 
portant, relatively,  in  the  future  than  at  the  pres- 
ent time. 

Section  II.  Capital-Goods. — According  to  the 
census  for  1900,  the  implements  and  machines  on 
the  farms  of  the  United  States  were  valued  at 
761,261,550  dollars,  which  is  an  average  of  ninety 
cents  per  acre  of  farm  land.  The  value  of  live 
stock  on  farms  was  given  at  3,078,050,041  dol- 
lars, or  an  average  of  three  and  sixty-six-hun- 
dredths  dollars  per  acre  of  farm  land.  Together, 
therefore,  the  value  of  the  live  stock,  tools  and 
machinery  amounted  to  four  and  fifty-six-hun- 
dredths  dollars  per  acre.  But  these  figures  do 
not  fairly  indicate  the  amount  of  capital  required 
to  operate  a  farm  in  this  country.  To  this  must 
be  added  the  money  which  the  farmer  is  required 
to  have  in  hand  for  meeting  current  expenses,  the 
value  of  the  grain,  hay,  etc.,  which  he  has  in  store 
at  the  time  when  the  valuation  of  the  live  stock 
is  made,  and  the  many  little  things  which  are  nec- 
essary and  yet  which  are  usually  omitted  from  the 
census  valuations. 

2  17 


AGRICULTURAL    ECONOMICS 

A  concrete  example  is  worth  more  than  ab- 
stract averages  in  giving  a  correct  notion  of  the 
amount  of  capital  a  tenant  farmer  must  have  in 
order  to  carry  on  agriculture  successfully. 

On  March  ist,  1904,  an  invoice  was  made  by 
disinterested  men,  of  all  the  live  stock,  grain,  and 
fodder  on  a  farm  in  southeastern  Iowa.  The 
farm  consisted  of  six  hundred  acres  of  land,  two 
hundred  and  ninety-five  acres  of  which  were 
plowed  or  mowed  land  at  the  time.  The  re- 
mainder was  in  pasture,  though  some  of  the  land 
then  in  pasture  had  been  and  will  again  be  under 
the  plow,  while  parts  of  the  pasture  land  are 
densely  covered  with  trees.  On  the  whole  the 
degree  of  intensity  of  culture  is  about  the  aver- 
age for  that  part  of  the  country,  which  is  cer- 
tainly far  from  being  farmed  intensively.  The 
land  had  been  farmed  "on  shares,"  one  party  fur- 
nishing the  land  and  half  of  the  live  stock  and 
bearing  half  of  the  expense  when  live  stock  or 
feed  was  purchased.  The  other  party  furnished 
half  of  the  live  stock,  all  of  the  tools  and  machin- 
ery, and  the  labor  needed  to  operate  the  farm. 
When  the  invoice  was  made  for  the  purpose  of 
bringing  this  partnership  to  a  close,  the  live  stock, 
grain,  hay,  etc.,  were  valued  at  about  five  thou- 
sand dollars.  This  is  eight  and  one-third  dollars 
per  acre.  The  live  stock  was  of  the  ordinary 
breeds  commonly  kept  in  that  part  of  the  country. 
The  farmer  estimated  the  value  of  the  tools  and 

18 


FACTORS    OF    PRODUCTION 

machinery  on  the  farm  at  six  hundred  dollars, 
though  if  all  of  it  had  had  to  be  purchased  new, 
it  would  have  cost  more  than  twice  that  amount. 
This  indicates  that  more  than  nine  dollars  per 
acre  was  required,  to  enable  the  farmer  to  assume 
the  ownership  of  all  of  the  live  stock,  grain,  fod- 
der, tools  and  machinery  on  the  farm  on  March 
ist.  To  this,  no  great  amount  would  need  to  be 
added  for  bills  which  had  to  be  met  before  the 
farm  could  be  made  to  yield  a  return,  for  the  farm 
was  in  full  running  order,  with  sales  occurring 
every  few  weeks. 

The  amount  of  capita!  required  for  carrying  on 
agriculture  in  the  principal  European  countries 
is  much  greater  than  the  amount  commonly  used 
in  this  country.  In  England,  the  better  farmers 
invest  forty  dollars  and  more  per  acre.  This  in- 
cludes, of  course,  all  the  capital  that  a  tenant 
farmer  must  be  able  to  command  in  order  to  carry 
on  agriculture  successfully.  The  advanced  rent, 
the  advanced  wages  of  labor,  the  cost  of  living 
until  returns  can  be  had,  as  well  as  the  value  of 
the  live  stock,  machinery,  etc.,  are  all  included  in 
this  amount. 

The  amount  of  capital  invested,  per  hectare  of 
land,  in  German  agriculture  has  greatly  increased 
in  the  last  hundred  years.  Early  in  the  Nine- 
teenth Century,  according  to  Albrect  Thaer,  the 
investment  of  168  marks1  per  hectare2  was 

XA  mark  is  worth  23.8  cents. 
aThe  hectare  is  equal  to  2.471  acres. 
19 


AGRICULTURAL    ECONOMICS 

counted  intensive  agriculture,  whereas  at  the  pres- 
ent time  more  than  six  hundred  marks  per  hec- 
tare are  sometimes  invested.  The  following  fig- 
ures have  been  given  to  represent  the  amount  of 
operating  capital  per  hectare  required  to  carry  on 
agriculture  in  Germany.  The  amount  varying 
in  the  different  parts  of  the  country  and  in  the 
different  lines  of  production.1 

Very  intensive  farming more  than  600  marks  per  hectare 

Intensive    farming between  400  and  600  marks  per  hectare 

Medium  intensive  farming  "      300  and  400  marks  per  hectare 

"        extensive      "         "      200  and  300  marks  per  hectare 

Extensive  farming  under  200  marks  per  hectare 

While  these  figures  for  the  amount  of  money 
invested  per  acre,  in  agricultural  production,  in 
European  countries  are  not  exactly  comparable 
with  those  for  the  United  States,  it  is  clear  that 
our  agriculture  is  much  less  intensive  than  that  of 
Germany  and  of  England. 

Section  III.  Population.  —  The  aggregate 
population  of  Continental  United  States  in  1900, 
was  75,994,575-  Of  this  total  thirty-eight  and 
fouiHenths  per  cent,  were  engaged  in  gainful  oc- 
cupations. Of  all  persons  ten  years  of  age  and 
over,  fifty  and  three-tenths  per  cent,  or  29,285,- 
922,  were  engaged  in  gainful  occupations.  Of 
the  male  population  ten  years  of  age  or  over, 
eighty  per  cent,  were  engaged  in  gainful  occu- 
pations ;  while  only  eighteen  and  eight-tenths  per 

1  Prof.  Dr.  Werner,  Berlin,  Der  Betrieb  der  Deutschen 
Landwirtschaft,  p.  74. 

20 


FACTORS    OF    PRODUCTION 

cent,  of  the  female  population  were  so  engaged. 
These  were  distributed  among  the  different  pur- 
suits as  follows: 

1900       1890  1880 

Agricultural  pursuits 35.7%  37.7%  44.3% 

Professional  service 4.3"       4.1"  3.5" 

Domestic  and  personal  service 19.2"  18.6"  19.7" 

Trade  and  transportation 16.4  "  14.6  "  10.7  " 

Manufacturing  and  mechanical  pur- 
suits    24.4  "  25.0  "  21.8  " 

There  were  10,438,219  persons  engaged  in 
agriculture  in  1900.  Of  these  5,681,257,  or 
fifty-six  per  cent,  were  farmers,  planters,  and 
overseers;  4,459,346  or  forty- four  per  cent,  were 
agricultural  laborers.  Of  these  "agricultural 
laborers"  more  than  half  (2,366,313)  were  mem- 
bers of  the  farmers'  families,  and  less  than  half 
(2,047,658)  were  hired  laborers,  so  there  was 
scarcely  more  than  one  hired  farm  hand,  on  the 
average,  for  every  three  farmers.  This  means 
that  in  the  vast  majority  of  cases  the  work  of  the 
farm  is  done  by  the  farmer  and  his  family ;  there 
being  many  large  farms  on  which  large  numbers 
of  hands  are  hired,  as  for  example  on  wheat 
farms,  on  sugar  plantations,  and  on  the  large 
grain  and  stock  farms  where  the  farmer  is  little 
more  than  a  superintendent  and  does  not  put  his 
own  hand  to  the  plow.  Under  "agricultural  pur- 
suits" are  included,  besides  the  above,  the  fol- 
lowing classes : 

Dairy  men  and  dairy  women 10,931 

Gardeners,  florists,  nurserymen,  etc 62,418 

21 


AGRICULTURAL    ECONOMICS 

Lumbermen  and  raftsmen 72,190 

Stock  raisers,  herders,  and  drovers 85,469 

Turpentine  farmers  and  laborers 24,737 

Woodchoppers 36,265 

Other  agricultural  pursuits 5,6o6 

There  were  forty-one  acres  of  improved  land 
in  the  United  States  in  1900  for  every  person  en- 
gaged in  strictly  agricultural  pursuits.  In  Eng- 
land there  is  a  little  over  eight  acres  of  improved 
agricultural  land  for  each  person  engaged  in 
agriculture.  In  Germany  one  person  is  employed 
in  agriculture  for  every  ten  acres  of  improved 
agricultural  land.  Much  work  is  done  by  hand 
in  European  countries  that  is  done  by  machinery 
in  America.  In  Germany,  for  example,  only 
about  one  farm  in  six  had  any  machinery  (i.  e., 
as  distinguished  from  tools)  used  upon  it  in  1895. 
It  is  the  great  number  of  small  farms  that  makes 
the  percentage  so  low.  Most  of  the  large  farmers 
used  some  machinery,  and  yet  scarce  a  third  of 
these  farmers  employed  mowing  and  reaping 
machines. 

A  better  test  of  the  relative  intensity  of  culture 
of  the  various  countries  is  the  number  of  bushels 
per  acre  which  they  produce  of  the  same  grain. 
For  the  year  1902  the  average  production  of 
wheat  in  the  United  States  was  14.5  bushels  per 
acre;  in  Germany,  23.5  ;  in  England,  31.9  bushels, 
For  the  same  year  the  average  production  of  oats 
in  the  United  States  was  28.7  bushels  per  acre; 
in  Germany,  44.9;  in  England  41.5  bushels, 

22 


FACTORS    OF    PRODUCTION 

whereas  the  natural  fertility  of  the  soil  of  the 
United  States  is  superior  to  that  of  these  Euro- 
pean countries.1 

Thus  it  seems  that,  compared  to  European 
countries,  we  use  a  small  percentage  of  our  total 
area  as  farm  land,  we  expend  a  small  amount  of 
labor  and  capital  per  acre,  and  we  win  a  small 
product  per  acre;  though  our  product  is  larger  (in 
quantity  at  least)  per  capita  of  those  engaged  in 
the  industry  than  that  of  the  older  countries. 

LITERATURE 

Twelfth  Census  (1900)  volumes  V  and  VI. 

Report  of  the  Industrial  Commission,  volumes  VI,  X,  XIX. 

Yearbook  of  the  Department  of  Agriculture. 

Population  and  Food  Products,  U.  S.  Dept.  of  Agr.  Div.  of 
Statistics,  Bulletin  No.  24  (1903)- 

The  Crop  Reporter,  published  by  the  Dept.  of  Agriculture. 

The  Agricultural  Returns,  published  annually  by  the  Board 
of  Agriculture  of  England. 

The  Imperial  Census  of  Germany  for  1895. 

Der  Betrieb  der  Deutschen  Landwirtschaft  am  Schluss  des 
19.  Jahrhunderts,  by  Drs.  Werner  and  Albert.  Ber- 
lin, 1900. 

1  See  Bulletin  No.  22,  U.  S.  Dept.  of  Agriculture,  Office  of 
Exp.  Station,  p.  166. 


CHAPTER  III 

THE  ECONOMIC  PROPERTIES  OF  THE  FACTORS 
OF  PRODUCTION 

Section  I.  The  economic  properties  of  land  as 
a  factor  in  agricultural  production. — It  is  a  famil- 
iar fact  that  land  is  essential  to  all  forms  of  eco- 
nomic activity.  Manufactures  and  commerce 
cannot  be  carried  on  without  the  use  of  land. 
These  industries  use  land,  however,  primarily  as 
standing-room.  The  character  of  the  soil  is  of 
little  or  no  significance  to  the  man  who  wishes  to 
use  land  simply  as  standing-room  for  a  cotton 
factory.  In  the  case  of  agriculture,  conditions 
are  quite  different.  To  the  farmer,  land  is  valu- 
able not  only  because  it  provides  space  for  build- 
ings and  roads,  and  for  the  performance  of  such 
work  as  the  threshing  of  grain,  and  the  feeding 
of  cattle;  it  is  valuable  to  him  first  of  all  because 
of  those  physical  and  chemical  characteristics  of 
the  soil  and  the  atmosphere  which  make  the  land 
capable  of  supporting  plant  life. 

Under  the  physical  conditions  which  are  con- 
ducive to  plant  growth  are  included :  ( i )  the 
moisture  and  (2)  the  temperature  of  the  soil 

24 


ECONOMIC    PROPERTIES 

and  the  air,  and  (3)  the  mechanical  structure  of 
the  soil.  The  amount  of  rainfall  and  sunshine 
remaining  the  same,  the  moisture  and  the  ten> 
perature  of  the  soil,  and  its  capacity  for  retain- 
ing the  chemical  elements  of  fertility  vary  greatly 
from  place  to  place  because  of  differences  in  the 
size  of  the  particles  of  the  soil.  By  cultivation 
the  soil  may  be  improved  to  some  extent,  in  this 
respect.  By  drainage  and  by  irrigation  the  mois- 
ture of  the  soil  can  be  modified,  and  by  the  use 
of  glass  and  'artificial  heat  the  temperature  of 
both  the  soil  and  the  atmosphere  can  be  regulated. 
But  in  most  places  and  for  most  purposes  Nature 
has  done  infinitely  more  for  man  than  he  can 
do  for  himself  in  providing  the  land  with  these 
desirable  physical  qualities. 

From  the  standpoint  of  the  economist  the  most 
important  chemical  conditions  of  plant  growth 
are:  (i)  nitrogen,  (2)  phosphoric  acid,  (3) 
potash,  and  (4)  water.  Other  chemical  com- 
pounds contribute  to  plant  growth,  but  these  are 
the  ones  which  require  our  especial  attention  be- 
cause they  are  present  in  the  soil  in  limited  and 
varying  quantities,  and  because  they  are  more  or 
less  readily  exhausted  and  require  considerable 
effort  to  increase  or  replenish  their  supply.  In 
the  humid  regions  where  the  water  needed  by 
plants  is  abundantly  supplied  by  Nature  this  ele- 
ment of  fertility  requires  little  or  no  attention, 
but  in  the  arid  regions  water  ranks  first  in  eco- 

25 


AGRICULTURAL    ECONOMICS 

nomic  importance.  The  carbon  dioxide  gas  of 
the  air  is  as  important  to  plant  growth  as  is 
water,  but  it  is  present  in  such  great  abundance 
that  it  has  no  value  placed  upon  it  and  hence  does 
not  enter  into  the  list  of  economic  conditions 
which  require  our  attention. 

All  of  these  physical  and  chemical  conditions 
of  plant  growth  are  usually  included  under  "the 
fertility  of  the  land."1  And  as  it  varies  greatly 
with  respect  to  these  conditions,  land  is  said  to 
vary  from  place  to  place  with  respect  to  its  fer- 
tility. 

When  a  man  contemplates  the  purchase  of  a 
farm  there  is  one  thing  more  which  is  of  vital 
importance  to  him.  He  wants  extent  of  land  and 
he  wants  this  land  to  be  fertile,  but  what  is  some- 
times even  more  significant  than  these  qualities  is 
the  location  of  the  farm  which  he  is  to  cultivate. 
In  fact  the  physical  and  chemical  characteristics 
of  the  land  are  greatly  influenced  by  its  loca- 
tion. Heat  and  moisture,  and  the  character  of 
the  rocks  from  which  the  soil  is  formed  vary 
greatly  from  place  to  place.  But  besides  these 
variations  in  the  natural  conditions,  there  are  vari- 
ations in  the  social  conditions  which  influence  the 
production  and  sale  of  products.  Large  popula- 
tions are  in  some  places  concentrated  on  small 
areas,  leaving  vast  territories  sparsely  settled. 
This  variation  in  the  density  of  population  may 

1 1.  P.  Roberts,  The  Fertility  of  the  Land,  p.  9. 
26 


ECONOMIC    PROPERTIES 

be  explained,  in  part  at  least,  in  terms  of  varia- 
tions in  the  physical  environment,  but  our  especial 
interest  is  in  the  effect  and  not  the  cause  of  this 
variation  in  the  density  of  population.  Where 
the  population  is  dense  capital  is  also  usually 
present  in  great  abundance,  and  can  be  had  more 
cheaply  than  in  the  sparsely  settled  districts. 
This  abundance  of  labor  and  capital  enables  the 
farmer  to  operate  his  land  more  cheaply.  But 
this  is  not  all.  The  farmer  who  is  nearer  a  great 
center  of  population,  such  as  London  or  New 
York,  can  sell  his  products  for  the  same  price 
which  is  paid  for  like  products  which  have  been 
shipped  great  distances.  Thus  it  is  that  of  two 
pieces  of  land  equally  fertile  the  farmer  prefers 
the  one  located  nearer  a  great  center  of  popula- 
tion, because  it  enables  him  to  produce  and  market 
products  more  cheaply. 

Because  of  these  variations  with  respect  to  fer- 
tility and  location,  land  is  said  to  vary  in  produc- 
tivity, or,  in  its  value-producing  power.  That 
is,  a  given  farmer,  employing  a  given  amount  of 
labor  and  capital-goods  of  a  specified  grade,  can 
obtain  larger  gross  receipts  upon  one  grade  of 
land  than  upon  another. 

The  words  " fertility"  and  "productivity"  have 
commonly  been  used  synonymously  to  designate 
the  relative  number  of  bushels  or  pounds  of  prod- 
uct obtained  from  a  given  area  of  land.  But  the 
one  common  property  of  economic  goods  is 

27 


AGRICULTURAL    ECONOMICS 

value.  Economic  goods  have  weight  and  bulk,  it 
is  true,  but  these  properties  they  share  in  common 
with  free  goods.  "We  need  therefore  some  term 
which  will  express  the  relative  capacity  of  dif- 
ferent pieces  of  land  to  produce  values,  and  since 
it  is  bad  economy  to  use  two  words  for  one  idea 
and  leave  another  idea  without  any  word  with 
which  it  may  be  expressed,  it  is  desirable  that  a 
more  equitable  distribution  of  words  should  be 
made.  Fertility  refers  to  the  quality  of  the  land. 
*  Variation  in  fertility  is  measured  in  terms  of  the 
pounds  or  bushels  of  the  product.  Instead  of 
using  the  \vord  productivity  to  designate  this 
same  idea  we  propose  to  use  this  term  to  desig- 
nate the  relative  value-producing-power  of  the 
land.  The  productivity  of  land  may,  and  usually 
does,  vary  from  place  to  place  because  of  varia- 
tions in  the  fertility  of  the  land  and  because  of 
differences  in  location  with  respect  to  the  central 
market.  Differences  in  the  productivity  of  land 
due  to  location  may  be  expressed  in  terms  of  vari- 
ations in  the  local  market  prices  of  the  products. 
Because  of  the  fact  that  land  is  limited  in 
quantity,  .some  economists  have  said  that  land 
partakes  of  the  character  of  a  monopoly.  This 
statement  is  rather  misleading,  however,  for  the 
essential  element  in  a  monopoly  is  unity  of  con- 
trol, and  land  does  not  lend  itself  readily  to  unity 
of  control.  What  these  economists  have  in  mind 
is  that  land  usually  commands  a  price  which  is 


ECONOMIC    PROPERTIES 

greater  than  the  cost  of  improving  such  land. 
This  higher  price  is  due,  however,  to  the  fact 
that  productive  land  is  relatively  scarce.  Land 
of  a  given  grade  may  have  a  value  placed  upon  it 
far  above  what  it  costs  to  bring  such  land  under 
cultivation ;  but  this  is  due  to  the  limited  quantity 
of  productive  land  and  as  this  scarcity  is  not  due 
to  the  control  of  man  but  to  the  nature  of  the 
physical  universe,  land  should  not  be  called  a 
monopoly  good. 

Section  II.  The  economic  properties  of  capi- 
tal-goods as  a  factor  in  agricultural  production. — 
The  capital-goods,  such  as  horses,  cattle,  machin- 
ery, and  buildings  which  are  used  in  agricultural 
production,  differ  from  land  in  that  they  can  be 
increased  in  quantity  indefinitely.  It  is  true  that 
effort  and  sacrifice  are  essential  to  the  production 
of  capital-goods,  but  with  the  growth  of  wealth 
and  the  progress  of  industrial  society,  less  and 
less  sacrifice  is  required  in  order  that  the  supply 
of  capital-goods  may  be  increased  or  improved. 

So  far  as  location  is  concerned  many  forms  of 
capital-goods  are  movable,  so  that  they  can  be 
taken  to  the  place  where  they  best  serve  the  pur- 
pose for  which  they  were  intended.  While  some 
forms  of  capital-goods  cannot  easily  be  moved 
after  they  are  once  constructed,  they  can  be  made 
where  they  best  serve  the  purpose  of  the  farmer. 
Hence,  while  the  productivity  of  land  is  greatly  in- 
fluenced by  location,  the  location  of  capital-goods 

29 


AGRICULTURAL    ECONOMICS 

is  determined  largely  by  their  opportunities  for 
productivity.  And  yet  all  forms  of  capital-goods 
vary  in  productivity.  Some  machines  are  better 
than  others  which  were  intended  to  do  the  same 
kind  of  work.  The  grain  binder,  for  example, 
is  more  useful  than  the  old  self-rake,  and  some 
binders  do  better  work  than  others.  Some  horses 
will  do  more  work  or  in  some  other  way  be  more 
productive  than  others.  Certain  breeds  of  cattle, 
sheep,  or  hogs  will  convert  the  food  given  them 
into  more  valuable  products  than  other  breeds. 
Hence,  other  things  being  equal,  the  man  who 
works  with  the  most  productive  forms  of  capital- 
goods  can  produce  the  largest  returns. 

This  variation  in  the  productivity  of  capital- 
goods  is  apt  to  be  overlooked,  because  capital- 
goods  are  valued  according  to  their  productivity, 
and  when  we  speak  of  the  amount  of  capital  em- 
ployed upon  a  given  farm  we  have  in  mind  the 
value  of  the  capital-goods,  and  of  course  one  dol- 
lar's worth  of  capital-goods  under  the  same  man- 
agement should  be  just  as  productive  as  any  other 
dollar's  worth. 

While  variation  in  productivity  is  common  to 
both,  there  is  an  important  difference  between 
land  and  capital-goods,  in  that  when  more  capital- 
goods  are  wanted  it  is  usually  the  more  productive 
forms  which  are  made,  while  an  increase  in  the 
amount  of  land  under  cultivation  usually  requires 
that  less  productive  land  be  resorted  to.  The 

30 


ECONOMIC    PROPERTIES 

history  of  agriculture  in  the  United  States  shows 
that  changes  in  the  character  of  the  capital-goods 
and  especially  of  the  machinery  has  greatly  influ- 
enced the  usefulness  or  productivity  of  this  factor 
of  production. 

"The  year  1850  practically  marks  the  close  of 
the  period  when  the  only  farm  implements  and 
machinery,  other  than  the  wagon,  cart  and  cotton- 
gin,  were  those  which,  for  want  of  a  better  desig- 
nation, may  be  called  implements  of  hand  pro- 
duction. Th'e  old  cast  iron  plows  were  in  general 
use.  Grass  was  mowed  with  the  scythe,  and  the 
grain  was  cut  with  the  sickle  or  cradle  and 
threshed  with  the  flail.  .  .  .  The  last  half  century 
has  witnessed  a  revolution  in  agricultural  methL 
ods,  and  the  new  implements  and  machines  intro- 
duced would  require  more  than  a  page  to  cata- 
logue."1 "For  the  United  States  the  value  of 
machinery  per  acre  of  farm  land  has  increased 
nearly  eighty  per  cent,  since  1850.  .  .  .  These  in- 
creases in  money  value,  however,  do  not  measure 
the  added  usefulness  of  the  new  machinery. 
This  is  measured  principally  by  the  degree  to 
which  the  machinery  saves  human  labor  by  sub- 
stituting the  power  of  animals  or  of  steam,"2 

"The  number  of  acres  of  the  leading  crops  per 
male  worker  increased  from  23.3  in  1880  to  31  in 
1900.  The  number  of  acres  of  these  crops  per 

1  Twelfth  Census,  Vol.  V,  p.  xxix. 

2  Void.,  p.  xxxi. 

31 


AGRICULTURAL    ECONOMICS 

working  animal  was  13.5  at  both  of  these  dates; 
but  the  average  number  of  horses  to  one  male 
worker  increased  from  1.7  in  1880  to  2.3  in 
1900."  From  these  figures  it  appears  that  in  the 
last  twenty  years,  by  the  aid  of  machinery,  and 
the  substitution  of  horse  power  for  hand  labor, 
the  effectiveness  of  human  labor  on  farms  has 
been  increased  to  the  extent  of  about  thirty-three 
per  cent.  "The  special  investigations  of  the 
Labor  Bureau  have  led  to  the  conclusion  that  by 
the  use  of  machinery  the  effectiveness  of  human 
labor  has  been  nearly,  if  not  quite,  doubled  since 
the  middle  of  the  century."1 

While  the  percentage  of  the  population  of  the 
country  which  was  engaged  in  agriculture  de- 
clined 19.4  per  cent,  during  the  two  decades  from 
1880  to  1900,  the  production  of  the  staple  food 
crops  per  capita  of  the  total  population  about 
held  its  own.  This  is  shown  by  the  following 
figures  :2 

1880  1900 

Wheat bu.   per  capita  9.16  8.66 

Cora "       "  34.98  34.94 

Oats   "       "        "  8.13  12.40 

Potatoes  "       "        "  3.38  3-60 

Cattle head  per  capita  .72  .69 

Hogs  "       "        "  .95  .83 

Sheep    "       "        "  .70  .52 

1  Twelfth  Census,  Vol.  V.,  p.  xxxi. 

2  United    States    Department    of    Agriculture,    Division    of 
statistics,    Bulletin    No.    24.      Relations    of    Population    and 
Food  Products  in  the  United  States,  pp.  20,  24,  30,  38,  57, 
65,  70. 

32 


ECONOMIC    PROPERTIES 

The  above  figures  indicate  also  that  while  the 
grain  crops  and  the  potato  crop  about  kept  pace 
with  the  increase  in  the  total  population  in  spite 
of  the  fact  that  the  share  of  the  population  en- 
gaged in  agriculture  decreased  greatly,  the  pro- 
duction of  live  stock  did  not  increase  so  rapidly  as 
did  the  total  population.  And  yet,  in  the  case  of 
live  stock  there  has  been  an  important  improve- 
ment in  the  breeds  which  would,  in  part  at  least, 
make  up  in  increased  size  and  value  per  head  for 
the  decline  in 'the  number  per  capita.  It  is  cer- 
tain that  in  those  lines  of  production  in  which 
new  forms  of  machinery  have  been  introduced  the 
effectiveness  of  labor  has  been  greatly  increased 
because  of  the  higher  degree  of  productivity  of 
these  new  forms  of  capital-goods. 

Section  III.  The  economic  properties  of  labor 
as  a  factor  in  agricultural  production. — There  is 
no  limit  to  the  increase  in  the  number  of  laborers 
except  that  set  by  the  limited  character  of  the 
other  factors  of  production.  The  English  econo- 
mist, Malthus,  called  attention  to  the  fact  that 
population  tends  to  increase  at  a  geometrical 
ratio,  that,  as  population  increases,  it  becomes 
necessary  to  resort  to  less  and  less  productive 
land,  where,  if  improvements  are  not  made  in  the 
methods  of  cultivation,  it  becomes  more  and  more 
difficult  to  make  a  living.  It  is  this  strong  tend- 
ency on  the  part  of  mankind  to  increase  in  num- 
bers, along  with  the  desire  of  most  individuals  to 
3  33 


AGRICULTURAL    ECONOMICS 

live  better  than  they  do  at  present,  that  is  the 
most  powerful  dynamic  factor  in  industrial 
society. 

The  population  of  the  United  States  has  in- 
creased very  rapidly  in  the  last  hundred  years. 
The  population  was  5,308,483  in  1800,  and  in 
1900  it  was  76,303,378.  The  territory  of  the 
United  States  expanded  in  the  mean  time  it  is 
true,  but  not  so  rapidly  as  did  the  population. 
The  number  of  inhabitants  per  square  mile  was 
6.6  in  1800,  and  had  risen  to  25.6  in  1900.  This 
means  that  the  land  resource  of  the  United  States 
is  rapidly  being  occupied,  and  it  is  a  fact  often 
commented  upon  in  recent  years  that  the  best  land 
is  now  all  in  use,  so  that  as  the  population  in- 
creases more  and  more  ingenuity  will  be  required 
to  make  the  soil  provide  sustenance  for  the  in- 
creasing numbers.  This  has  already  resulted  in 
efforts  to  increase  the  available  area  of  agricul- 
tural land  by  means  of  drainage  and  irrigation, 
and  in  efforts  to  make  each  acre  of  land  yield  a 
larger  product  by  means  of  a  more  intensive  cul- 
ture. In  general  it  would  seem,  therefore,  that 
the  propensity  on  the  part  of  human  beings  to 
increase  in  numbers  tends  to  be  transmuted  into 
an  improvement  in  the  quality  of  the  labor  supply. 

The  labor  of  all  those  who  are  engaged  in  agri- 
culture is  not  equally  productive.  This  is  due  to 
variations  in  the  efficiency  of  those  engaged  in  this 
industry.  There  are  more  than  five  million  farm- 

34 


ECONOMIC    PROPERTIES 

ers  in  the  United  States.  From  general  observa- 
tions we  know  that  some  of  these  farmers  can 
scarcely  make  a  living,  others  live  comfortably  and 
gradually  save  enough  to  buy  a  small  farm,  while 
still  others  are  very  prosperous,  living  well  and 
accumulating  considerable  sums  of  money  from 
year  to  year.  The  relative  degree  of  prosperity  to 
which  the  American  farmer  can  attain  is  deter- 
mined largely  by  his  own  efficiency. 

The  variation  in  the  efficiency  of  the  farmers 
may  be  either  qualitative  or  quantitative.  Quali- 
tative efficiency  refers  to  the  return  which  a  man 
can  produce  upon  a  given  piece  of  land  with  a 
given  supply  of  capital-goods.  Quantitative  effi- 
ciency refers  to  the  quantity  of  land  and  capital- 
goods  which  a  man  can  operate.  When  two 
farmers  employ  equal  amounts  of  labor  and  capi- 
tal-goods upon  equal  areas  of  equally  productive 
land,  the  one  who  possesses  a  relatively  high  de- 
gree of  qualitative  efficiency  can  produce  a  larger 
return  than  his  competitor  who  is  qualitatively 
less  efficient.  The  larger  return  is  won  by  the 
farmer  who  is  qualitatively  more  efficient  because 
he  shows  greater  skill  in  performing  his  work. 
He  uses  better  judgment  in  planning  his  farm 
operations,  in  regulating  his  field  system,  in 
selecting  seeds,  in  choosing  tools  and  machinery 
with  which  to  do  the  work,  or  in  the  breeding  and 
feeding  of  live  stock.  The  farmer  who  is  quanti- 

35 


AGRICULTURAL    ECONOMICS 

tatively  the  more  efficient  can  do  more  work  of  a 
given  quality. 

With  respect  to  the  efficiency  of  the  farmers  of 
the  United  States  we  may  say,  from  general  ob- 
servation, that  they  are  more  alert  and  do  more 
work  than  do  the  farmers  of  England, — they  are 
quantitatively  more  efficient;  but  it  seems  true 
also  that  they  are  not  in  the  habit  of  doing  their 
work  so  carefully, — they  are  qualitatively  less  effi- 
cient. This  difference  is  doubtless  due  in  part  at 
least  to  the  fact  that  extensive  culture  has  gener- 
ally been  most  profitable  in  America,  while  inten- 
sive culture  has  long  been  necessary  in  Europe.  In 
England,  keen  competition  for  the  use  of  land  has 
weeded  out  the  farmers  who  could  not  produce  a 
large  surplus  over  costs  on  each  acre  of  land, 
while  in  the  United  States  this  class  has  been  able 
to  compete  more  successfully.  At  the  present 
time,  however,  the  competition  for  the  use  of  land 
is  becoming  keen  in  this  country,  and  in  the 
future  the  farmer  who  does  not  plan  his  work  care- 
fully and  do  it  well,  is  sure  to  find  it  more  and 
more  difficult  to  pay  the  price  which  his  compete 
tors  are  offering  for  the  use  of  land. 

One  element  of  our  agricultural  population  is 
markedly  inefficient,  both  from  the  standpoint  of 
the  quantity  and  the  quality  of  their  work.  In 
1900,  thirteen  per  cent,  of  the  farms  of  the  United 
States  were  operated  by  negroes.  In  the  South 
Atlantic  States  the  percentage  of  negro  farmers 

36 


ECONOMIC    PROPERTIES 

was  thirty,  in  the  South  Central  States  it  was 
twenty-seven  and  two-tenths,  while  in  the  one 
state  of  Mississippi  the  percentage  was  fifty-eight 
and  three-tenths.  The  size  of  their  farms  is 
small, — averaging  about  fifty-one  acres.  That 
they  do  not  work  very  strenuously  nor  compete 
very  keenly  for  the  use  of  land,  is  shown  by  the 
fact  that  land  of  practically  the  same  grade  is 
much  less  valuable  in  Alabama  where  the  negroes 
predominate  than  in  Texas  where  the  whites  are 
in  the  majority.  In  all  of  the  thirty-nine  counties 
of  the  "Black  Prairie"  of  Texas  the  whites  were 
in  the  majority  in  1890,  and  the  average  value  of 
land  was  12.19  dollars  per  acre;  whereas,  similar 
soil  was  worth  6.40  dollars  per  acre  in  the  "Black 
Prairie"  of  Alabama  in  which  there  are  twelve 
counties,  and  in  all  of  which  counties  there  were 
more  negroes  than  whites.1 

A  Southern  planter,  interested  in  the  improve- 
ment of  the  negroes,  is  quoted  as  saying:  "One 
of  the  things  which  militates  most  against  the 
negro  is  his  unreliability.  .  .  .  His  mental  proc- 
esses are  past  finding  out  and  he  cannot  be  counted 
on  to  do  or  not  to  do  a  given  thing  under  given 
circumstances."1  "Judged  by  present  stand- 
ards," says  Carl  Kelsey,  "the  negro  is  decidedly 
lacking.  .  .  .  Something  is  holding  him  back,  .... 

1  Carl  Kelsey,  The  Negro  Farmer,  p.  69 ;  also,  Harry  Ham- 
mond, in  The  Cotton  Plant  (Bulletin  No.  33,  U.  S.  Dept.  of 
Agr.,  Office  of  Experiment  Stations),  p.  242. 

37 


AGRICULTURAL    ECONOMICS 

it  is  his  inheritance  of  thousands  of  years  in 
Africa."1 

Thus  a  review  of  the  economic  properties  of 
the  factors  of  production  shows  them  to  be  alike 
in  that  they  vary  in  productivity.  This  variation 
in  productivity  is  a  fact  that  must  ever  be  kept 
in  mind  in  any  discussion  of  the  organization  of 
the  factors  of  production.  On  the  other  hand  it 
has  been  found  that  land  is  very  different  from 
the  other  factors  of  production  with  respect  to 
its  capacity  for  being  increased  in  quantity.  This 
fact  becomes  important  in  explaining  why  the 
organization  of  agriculture  must  ever  be  changing 
with  the  progress  of  society. 

LITERATURE 

Alfred  Marshall,  Principles  of  Economics,  Book  IV,  Chap- 
ter II  and  Chapter  IV  (2d  Ed.). 

Richard  T.  Ely,  Outlines  of  Economics,  Book  II,  Chapter  II. 
The  Twelfth  Census  of  the  United  States,  Volume  V. 
Carl  Kelsey,  The  Negro  Farmer. 

1  Carl  Kelsey,  The  Negro  Farmer,  p.  67. 


CHAPTER  IV 

THE   GUIDING   PRINCIPLE   IN    THE   ORGANIZA- 
TION OF  THE  FARM 

There  was  a  time  when  each  farm  family  or 
each  small  community  tried  to  produce  for  itself 
all  the  food,  clothing,  and  shelter  necessary  to  its 
well-being, — each  family  carried  on  both  agri- 
culture and  manufactures.  This  was  the  ideal  in 
western  Europe  in  the  days  of  Karl  the  Great, 
and  it  has  not  been  long  since  it  was  the  ideal  of 
the  pioneer  farmer  in  America.  But  with  the 
modern  organization  of  industrial  society,  men 
have  found  that  a  given  amount  of  economic 
activity  will  produce  the  means  of  satisfying  a 
greater  number  of  wants  when  each  man  devotes 
himself  more  or  less  exclusively  to  some  one  line 
of  production.  ^  This  specialization  in  production 
brings  larger  returns  because  (i)  some  parts  of 
the  world  are  especially  well  suited  for  the  pro- 
duction of  certain  products,  (2)  some  men  are 
especially  well  fitted  for  performing  one  kind  of 
work  while  others  can  best  do  something  else,  and 
(3)  any  man  can  accomplish  more  when  he  de- 
votes all  of  his  time  and  attention  to  one  kind  of 
work  than  when  he  changes  about  indefinitely 

39 


AGRICULTURAL    ECONOMICS 

from  one  thing  to  another  so  that  he  never  ac- 
quires a  high  degree  of  skill  in  any  line,  to  say 
nothing  of  the  loss  of  time  in  making  changes. 

As  a  result  of  the  development  of  commerce  in 
the  products  of  agriculture,  the  modern  farmer 
has  found  it  profitable  to  look  primarily  to  the 
production  of  a  few  staples  which  can  be  put 
upon  the  market  in  exchange  for  the  great  variety 
of  things  which  he  desires  to  use.  Incidentally 
many  modern  farmers  produce  certain  articles, 
such  as  fruits  and  vegetables,  primarily  for  the  use 
of  their  own  households,  and  here  they  are  free 
to  follow  their  own  instincts,  as  did  the  self- 
sufficing  farmers  of  olden  times,  and  produce 
those  things  which  they  like  best  to  consume ;  but 
in  the  production  of  the  staples  of  commerce  they 
must,  if  they  would  best  succeed,  produce  those 
things  which  will  enable  them  to  obtain  upon  the 
market  the  largest  possible  means  of  supplying 
their  wants,  in  return  for  every  unit  of  effort 
which  they  expend  upon  their  farms. 

From  the  point  of  view  of  the  farmer,  then,  the 
first  problem  before  us  in  the  economics  of  agri- 
culture pertains  to  the  selection  of  land  and  the 
management  of  a  farm  in  such  a  manner  as  will 
enable  the  farmer,  one  year  with  another,  to  win 
the  largest  net  profits.  For  example,  if  a  farmer 
is  operating  land  in  a  given  community  he  should 
endeavor  to  determine  which  grade  of  land  to  cul- 
tivate, which  kinds  of  crops  to  grow,  how  in- 

40 


ORGANIZATION    OF    THE    FARM 

tensely  the  land  should  be  cultivated  in  the  case 
of  each  crop,  and  how  large  a  farm  he  should  at- 
tempt to  operate  in  order  that,  after  he  has 
counted  out  the  rent  of  the  land  (or  the  interest 
on  the  value  of  the  land  and  the  cost  of  repairs, 
etc.,  if  he  owns  the  land),  the  expense  (in  the 
forms  of  interest  and  wear  and  tear)  to  which  he 
has  been  for  the  use  of  capital-goods,  and  the  cost 
of  hired  labor,  the  total  net  profit  which  is  left  to 
him  and  his  family  in  return  for  their  own  labor, 
skill,  and  enterprise  shall  be  as  large  as  possible. 

We  find  it  desirable  in  this  treatise  to  look  upon 
the  farmer  and  his  family  as  a  unit,  and  to  use  the 
phrase  "net  profit"  to  designate  that  share  of  the 
entire  product  of  the  farm,  which  is  attributed  to 
the  personal  services  of  the  farmer  and  his  family. 
It  is  not  essential  that  the  net  profit  be  in  the  form 
of  money,  a  portion  of  it  may  well  be  retained  in 
the  form  of  commodities  which  may  be  used 
directly  by  the  family.  The  articles  so  used  have 
their  value  quite  as  clearly  as  do  those  which  are 
sold.  In  speaking  of  the  farmer's  net  profit, 
therefore,  the  value  of  the  products  retained  for 
home  consumption  should  be  included. 

From  the  standpoint  of  economy  in  production, 
the  modern  system  which  is  called  commercial 
agriculture,  is  without  question,  far  superior  to 
the  old  self-sufficing  system,  for  it  undoubtedly 
enables  the  farmers  to  win  a  larger  net  profit; 
but  from  the  standpoint  of  justice  in  distribution, 

41 


AGRICULTURAL    ECONOMICS 

the  commercial  system  has  been  challenged,  and 
there  is  doubtless  a  chance  for  improvement  in 
this  regard.  To  illustrate  the  way  in  which  this 
injustice  may  arise,  let  us  suppose  that  a  given 
farmer  puts  forth  a  given  amount  of  labor  and 
capital  in  the  production  of  goods  which  he  sells 
upon  the  market  for  one  hundred  dollars;  and 
suppose  also  that  when  this  money  is  invested  in 
the  various  articles  which  he  wishes  to  consume 
the  farmer  finds  that  the  commodities  which  he 
is  taking  home  in  return  for  the  products  of  his 
farm,  were  the  product  of  much  less,  say  twenty 
per  cent,  less,  labor  and  capital  than  the  amount 
which  he  expended  upon  the  commodities  which 
he  took  to  the  market,  and  that  this  difference  is 
due  to  the  fact  that  some  men  have  a  power  of 
absorbing  much  of  the  profits  of  labor  by  simply 
manipulating  values  without  adding  anything  to 
the  usefulness  of  commodities.  Certainly  if  such 
a  condition  existed  it  would  be  an  injustice  to  the 
farmer  even  though  the  articles  which  he  received 
in  this  way  would  satisfy  many  more  wants  and 
satisfy  those  more  completely  than  he  could  hope 
to  satisfy  them  if  he  tried  to  produce  for  himself 
every  article  which  he  consumes. 

It  has  been  alleged  that  there  are  men  who  do 
no  work,  but  simply  sit  at  certain  points  where 
exchanges  are  made  and  demand  that  their  bas- 
kets be  filled.1  To  avoid  this  alleged  injustice  in 

1  Wilbur  Aldrich,  Farming  Corporations,  p.  169. 
42 


ORGANIZATION    OF    THE    FARM 

the  distribution  of  wealth,  it  has  been  proposed1 
that  "Farming  Corporations"  be  organized,  and 
that  these  corporations  make  it  their  business  to 
produce  for  themselves  everything  they  want  to 
use.  It  is  proposed  that  no  attention  shall  be 
paid  to  the  commercial  world  nor  to  commercial 
values,  but  simply  to  the  wants  of  the  farmers  and 
their  families.  Every  kind  of  agricultural  prod- 
uct which  may  be  desired  for  use  by  the  members 
of  this  corporation  is  to  be  produced  by  them. 
Wool  is  to  be'  produced  and  converted  into  cloth- 
ing, beef  is  to  be  produced  for  home  use,  and  the 
hides  of  the  animals  converted  into  shoes  for 
home  use.  Thus  to  avoid  unjust  treatment  it  is 
proposed  to  throw  away  the  advantages  of  the 
commercial  system  and  revert  to  the  old  self- 
sufficing  system  in  agricultural  production. 

Mr.  L.  H.  Kerrick,  of  Bloomington,  Illinois, 
a  leading  and  successful  farmer  of  that  state, 
delivered  an  address  at  the  Iowa  Agricultural  Col- 
lege, Ames,  Iowa,  a  year  or  more  ago,  in  which 
he  said  in  part : 

The  farmer  has,  in  my  region  certainly,  become  too 
much  imbued  with  the  spirit  of  commercialism.  He  has 
gone  too  far,  I  think,  in  the  way  of  producing  things  to 
"sell"  He  raises  big  crops  of  corn  and  oats  to  sell,  or  feeds 
many  cattle  and  hogs  for  the  market.  He  sells  these  at  the 
other  fellow's  prices.  Then  he  turns  about  and  buys  at  the 
other  fellow's  prices,  supplies  of  various  kinds  that  he 
might  easily  have  produced  on  his  own  farm.  By  this  prac- 
tise, he  puts  himself  twice  in  the  enemy's  hands— once  when 

1  Wilbur  Aldrich,  Farming  Corporations,  p.   169. 
43 


AGRICULTURAL    ECONOMICS 

he  sells,  and  again  when  he  buys.  This  is  not  the  highest 
.  and  best  idea  of  living  by  farming.  The  first  thing  a 
farmer  should  do  is  to  surround  himself  in  his  farm  home 
with  everything  he  can  make  or  produce  that  will  promote 
the  health,  comfort,  safety  and  pleasure  of  himself  and 
family.  This  is  what  the  farm  is  for,  first.  And  how  few 
good  and  needful  things  there  be  that  may  not  be  produced 
and  provided  on  a  good  farm  and  in  and  about  a  real  farm 
home!  I  do  not  attempt  to  name  the  innumerable  good 
things  of  his  own  garden  and  orchard  and  field — all  prime, 
fresh  and  exactly  to  his  liking,  which  the  provident  farmer 
may  have  if  he  can  only  get  that  idea  of  raising  things  to 
sell  out  of  his  head  or  at  least  modified,  and  get  that  other 
idea  of  producing  things  on  his  own  farm  for  his  own  use. 
If  farmers  everywhere  would  think  first  and  work  first  to 
provide  for  their  wants  on  their  own  farms,  then  they 
might  be  able  to  set  the  price  on  the  surplus  they  have  to 
sell.  Then  the  surplus  would  not  be  so  overwhelming  in 
volume.  Then  there  might  be  competition  among  the  buy- 
ers of  his  surplus.  The  consumer  might  not  then  be  so 
able  as  now  to  sit  complacently  waiting  to  be  solicited  to 
buy  this  enormous  surplus  at  his  own  price.  The  railroad 
people  then  might  take  on  better  manners  and  be  willing  to 
give  a  more  nearly  just  rate,  and  they  might  be  more  care- 
ful to  give  good  service. 

The  farmer  with  the  right  idea  of  farming  and  of  farm 
life  and  of  farm  opportunities,  is  the  man  I  have  most  faith 
in  to  curb  trusts  and  corporations  generally — such  as  need 
curbing. 

The  makers  of  machines  and  implements  and  of  barbed 
wire  and  of  all  that  sort  of  thing,  cannot  eat  their  stuff — 
they  must  sell  to  get  any  good  out  of  their  product.  They 
cannot  live  at  all  without  selling.  But  the  right  kind  of  a 
farmer  can  live  a  long  time  without  selling  his  product — he 
can  eat  it  and  live.  Suppose  the  other  fellow  asks  of  you  an 
exorbitant  price  for  his  wares.  Just  let  him  keep  them  a. 
while,  or  try  to  keep  them.  They  can't  keep  them,  because 
they  can't  eat  them ;  and  to  get  something  to  eat,  they  must 
sell.  But  you,  my  farmer  friends,  can  keep  yours  a  while 

44 


ORGANIZATION    OF    THE    FARM 

and  be  living  like  kings — eating  your  bread  and  meat  and 
good  apples  and  fresh  butter  and  eggs  and  milk.  The  other 
fellow  can  only  keep  his  just  a  little  while,  until  you  hear 
the  prices  of  his  wares  a  cracking.  The  farmer  is  a  trust 
breaker,  if  he  only  knows  it.  I  have  little  faith  in  legis- 
latures and  courts  and  magazine  writers  and  orators,  as 
trust  breakers.  But  the  farmer  with  the  right  idea,  as  I 
have  been  trying  to  illustrate,  can  fortify  himself  in  his 
farm  home  for  a  much  longer  siege  than  the  manufacturer 
or  the  railroad  manager  can  put  up  against  him.  And  the 
beauty  of  it  all  is,  the  farmer  can  be  happy  all  the  same, 
and  all  the  time. 

That  too  many  farmers  neglect  to  provide  their 
families  with  the  variety  and  abundance  of  fruits 
and  vegetables  which  they  might  and  should  pro- 
duce primarily  for  home  use,  and  that  they  also 
generally  fail  to  appreciate  the  possibility  of  cre- 
ating for  themselves  beautiful  surroundings  by 
planting  flowers  and  shrubs  and  trees,  is  frankly 
admitted.  This  condition  of  affairs  is  to  be  re- 
gretted, and  should  be  remedied.  One  of  the 
greatest  of  economists,  John  Stuart  Mill,  has 
said :  "  Solitude  in  the  presence  of  natural  beauty 
and  grandeur  is  the  cradle  of  thoughts  and  aspiral- 
tions  which  are  not  only  good  for  the  individual, 
but  which  society  could  ill  do  without."1  We 
need  more  of  the  "thoughts  and  aspirations"  such 
as  the  "natural  beauty  and  grandeur"  of  the  ideal 
country  home  may  inspire,  and  it  is  certainly  to 
be  hoped  that  the  American  farmer  will  avail 
himself  of  his  natural  opportunities  and  surround 

1  Principles  of  Political  Economy,  Book  IV,  Chapter  VI,  §  2. 

45 


AGRICULTURAL    ECONOMICS 

himself  with  everything  which  will  acid  to  the 
dignity  and  beauty  of  his  home. 

But  if  these  beautiful  surroundings  'are  to  be 
created  they  must  first  be  desired  by  the  farmers, 
and  it  will  certainly  be  admitted  that  the  desire  for 
food,  clothing,  and  shelter  naturally  and  properly 
come  first  and  should  be  satisfied  before  much 
attention  is  given  to  the  creation  of  beautiful 
surroundings;  and,  again,  to  enjoy  the  beautiful 
surroundings,  one  must  have  leisure,  and  in  order 
to  have  time,  after  satisfying  the  more  urgent 
wants,  to  create  and  enjoy  beautiful  surround- 
ings, it  is  important  that  the  farmer  avail  himself 
of  the  most  economical  means  of  satisfying  these 
wants.  We  object,  therefore,  to  the  general 
principle  laid  down  by  Mr.  Kerrick,  that  farmers 
everywhere  should  "think  first  and  work  first  to 
provide  for  their  wants  on  their  own  farms," 
rather  than  to  look  primarily  to  the  production  of 
those  things  which  will  give  them  the  greatest 
purchasing  power  in  the  market.  We  believe  the 
latter  method  to  be  the  one  which  will  bring  the 
largest  means  of  satisfying  wants  for  a  given 
amount  of  exertion,  whereas,  Mr.  Kerrick's  sug- 
gestion points  towards  a  reversion  to  the  self- 
sufficing  economy  of  earlier  times,  and  to  a  sacri- 
fice of  much  of  the  benefit  which  has  resulted 
from  the  extension  of  commerce  and  from  spe- 
cialization in  industry. 

There  are,  doubtless,  many  injustices  in  the 
46 


ORGANIZATION    OF    THE    FARM 

present  complex  commercial  system  of  agricul- 
tural production;  but,  in  spite  of  this  objection, 
the  commercial  system  is  superior  to  the  old  self- 
sufficing  economy  which  was  only  desirable  in  an 
earlier  stage  of  economic  society  when  the  dan- 
gers to  commerce  were  so  very  great  and  the 
means  of  transportation  had  been  so  little  devel- 
oped that  the  farmers  could  gain  little  or  nothing 
by  producing  for  the  market.  Modern  agricul- 
ture is  not  entirely  commercial,  yet  the  produc- 
tion for  the  market  is  the  dominant  feature.  The 
commercial  system  has  replaced  the  self-sufficing 
system,  because  it  brings  larger  returns  for  .the 
efforts  expended,  and  our  aim  should  be  not  to 
revert  to  a  less  economical  system  in  order  to 
avoid  the  evils  which  have  arisen,  but  to  remove 
the  evils  which  accompany  it  and  thus  perfect  the 
present  commercial  system. 

When  the  farmer  follows  the  rule  of  seeking 
the  largest  net  profits,  he  will  not  be  bound  to  any 
one  system,  he  will  produce  for  home  consump- 
tion just  to  the  extent  that  he  can  produce  more 
cheaply  than  to  buy  upon  the  market.  That 
which  is  good  practise  in  this  regard  at  one  time 
and  place  may  be  bad  economy  at  the  same  time 
at  another  place,  and  at  the  same  place  at  another 
time. 

A  review  of  the  development  of  commercial 
agriculture  in  this  country  will  help  us  to  under- 

47 


AGRICULTURAL    ECONOMICS 

stand  better  the  present  situation  in  the  United 
States. 

The  beginners  of  American  agriculture  were 
Englishmen,  and  the  course  which  they  first  took 
in  the  New  World  was  greatly  influenced  by  the 
stage  of  industrial  progress  with  which  they  were 
familiar  at  home.  In  the  Seventeenth  Century, 
the  greater  part  of  the  land  of  England  was  di- 
vided up  into  small  holdings  cultivated  by  tenant 
or  by  landowning  farmers  who  looked  primarily 
to  the  production  of  such  crops  as  were  needed  in 
their  own  households.  In  some  parts  of  the 
country,  however,  the  organization  of  agriculture 
had  taken  on  a  very  different  form.  Large  areas 
of  land  in  the  southeastern  part  of  England  had 
been  made  into  sheep  farms  on  which  wool  was 
produced  primarily  for  the  market. 

Thus,  in  the  Seventeenth  Century,  England 
had  two  types  of  farmers.  The  peasant  farmer 
was  a  hard  working,  pains-taking  tiller  of  the  soil 
who  was  able  to  live  "unto  himself."  The  wool 
and  flax  which  were  gro\vn  on  his  little  farm  were 
manufactured  by  the  farmer  and  his  family  into 
the  various  articles  which  were  desired  for  home 
consumption.  The  peasant's  house  was  usually 
of  simple  construction,  such  as  the  farmer  could 
make  for  himself  out  of  such  materials  as  could 
be  found  in  the  immediate  neighborhood.  Cot- 
tages made  of  mud  and  straw  were  very  com- 
mon in  the  central  and  northern  counties.  This 

48 


ORGANIZATION    OF    THE    FARM 

farmer  was  just  the  kind  to  succeed  in  a  new 
country  where  commerce  could  not  be  counted 
upon  to  supply  such  stores  of  goods  as  the  wants 
of  men  demand. 

The  second  class  of  English  farmers  had  been 
in  the  habit  of  producing  primarily  for  the  mar- 
ket, and  depending  upon  the  market  for  the  sup- 
plies of  clothing,  luxuries,  etc.,  which  it  was  their 
desire  to  consume.  They  had  passed  on  to  that 
stage  in  the  evolution  of  industrial  society  where 
the  commercial  side  of  their  agriculture  domiL 
nated,  and  without  a  market  they  could  not  well 
survive.  Having  before  our  minds  these  two 
classes  of  English  farmers,  let  us  next  take  a 
glance  at  the  country  which  they  were  to  occupy. 

The  new  country  provided  new  crops,  such  as 
maize,  potatoes,  and  tobacco,  the  culture  of  which 
could  be  learned  from  the  Indians.  The  climate 
of  the  eastern  coast  of  America  is  very  different 
from  that  of  England,  and  much  colder  than  the 
settlers  may  have  expected  to  find  in  a  latitude 
so  much  south  of  their  mother  country.  The 
Atlantic  coast  presents  two  very  different  areas; 
tide-water  Virginia,  with  her  mild  climate,  rich 
soil,  and  slow  flowing  rivers  which  were  well 
suited  for  becoming  the  arteries  of  commerce 
into  the  interior;  and  New  England,  with  her 
more  severe  climate,  her  poorer  soil  and  rough 
surface  traversed  by  swift  flowing  streams  which 
4  49 


AGRICULTURAL    ECONOMICS 

did  not  lend  themselves  readily  to  the  purposes 
of  transportation. 

Both  of  these  classes  of  English  farmers  came 
to  America.  Both  classes  went  to  New  England 
and  both  classes  went  to  Virginia.  The  first 
class,  the  self-sufficing  farmers,  got  along  well  in 
New  England.  They  learned  to  grow  maize 
and  potatoes.  They  found  plenty  of  fish  in  the 
streams.  Their  old  habits  of  building  houses  for 
themselves,  manufacturing  their  own  clothing, 
and  producing  and  preparing  for  winter's  use 
abundant  supplies  of  food,  made  them  the  natural 
inhabitants  of  the  isolated  New  England  of  that 
time. 

But  the  commercial  farmers  were  not  so  suc- 
cessful in  the  North  as  were  their  less  pretentious 
fellow  countrymen.  They  sought  diligently  for 
some  agricultural  product  which  could  be  trans- 
ported to  London  with  profit;  for  it  was  from 
London  that  they  could  draw  the  comforts  and 
luxuries  which  they  had  learned  to  consume  but 
which  they  were  unable,  themselves,  to  produce. 
As  it  was  unprofitable  in  those  early  days  to  ship 
grain  to  London  except  in  years  when  the  price 
was  abnormally  high,  and  as  no  staple  was  found 
which  would  bear  shipment  to  Europe,  commer- 
cial agriculture  was  unable  to  play  an  important 
role  in  New  England. 

In  the  South,  the  commercial  agriculturists  met 
with  better  success.  There,  as  in  New  England, 

so 


ORGANIZATION    OF    THE    FARM 

a  thorough  search  was  made  for  a  staple  which 
would  form  the  basis  of  a  profitable  system  of 
commercial  agriculture.  The  production  of  silk 
was  attempted,  but  with  little  or  no  success. 
Wine  was  looked  to  as  a  possible  solution  of  the 
problem,  but  this,  too,  led  only  to  disappointment. 
Tobacco  was  finally  tried  with  success  in  the 
Southern  Colonies,  and  the  South  was  launched 
upon  a  career  of  her  own.  Tobacco  had  become 
fashionable  in  England,  and  demanded  a  high 
price.  This  was  the  opportunity  of  the  com- 
mercial farmers.  They  could  produce  tobacco 
and  send  it  by  the  cargo  directly  from  the  river 
wharves  on  their  own  plantations  to  the  markets 
of  London.  This  enabled  them  to  order  what- 
ever they  pleased  from  the  merchants  of  Europe. 
The  labor  problem  arose.  Free  white  men 
could  do  better  working  for  themselves  in  a  coun- 
try where  rich  soil  "was  to  be  had  for  taking  up."1 
Contract  labor  was  resorted  to,  but  this  did  not 
supply  the  demand.  The  African  negro  was 
introduced  to  supply  the  tobacco  plantations  with 
the  desired  number  of  laborers.  And  thus,  it  was 
tobacco  and  slaves  that  made  commercial  agricul- 
ture possible  and  profitable  to'  the  farmers  of  the 
South  and  led  to  the  development  of  the  large 
plantations  of  Virginia  which  were  comparable 
in  size  and  dignity  to  some  of  the  estates  of  the 

1  Hart's   American  History   Told   by   Contemporaries,  Vol. 
II.,  P.  387. 

51 


AGRICULTURAL    ECONOMICS 

country  gentlemen  of  England.  The  small 
farmers  were,  sooner  or  later,  crowded  out  of  tide- 
water Virginia. 

In  the  North  the  self-sufficing  economy  re- 
mained important  for  a  long  time.  The  small 
farmers  from  New  England,  New  York,  and 
Pennsylvania  gradually  moved  westward,  and  it 
was  the  same  conditions  which  made  them  suc- 
cessful in  the  early  settlement  of  the  North  that 
fitted  them  for  the  life  of  the  pioneer.  Since  the 
days  of  railways,  new  countries  can  be  settled 
successfully  by  commercial  agriculturists,  but  it 
was  only  yesterday  that  the  self-sufficing  pioneer 
was  an  important  factor  in  the  development  of 
the  resources  of  the  United  States. 

The  self-sufficing  pioneer  farmer  was  free 
from  the  power  of  trusts  and  corporations,  but 
his  life  was  full  of  hardships  such  as  few  farmers 
would  now  willingly  endure.  The  following 
quotation,  descriptive  of  the  life  of  a  pioneer 
family  during  their  first  year  in  their  new  home 
in  western  Pennsylvania,  in  1773,  sets  forth  the 
hardships  of  these  pioneers  in  a  very  pathetic 
manner.  "For  six  weeks  we  had  to  live  without 
bread.  The  lean  venison  and  the  breast  of  the 
wild  turkey,  we  were  taught  to  call  bread.  The 
flesh  of  the  bear  was  denominated  meat.  This 
artifice  did  not  succeed  very  well,  after  living  in 
this  way  for  some  time  we  became  sickly,  the 
stomach  seemed  to  be  always  empty,  and  tor- 

52 


; 


ORGANIZATION    OF    THE    FARM 

mented  with  a  sense  of  hunger.  I  remember  how 
narrowly  the  children  watched  the  growth  of 
the  potato  tops,  pumpkin  and  squash  vines,  hop- 
ing from  day  to  day,  to  get  something  to  answer 
in  the  place  of  bread.  How  delicious  was  the 
taste  of  the  young  potatoes  when  we  got  them! 
What  a  jubilee  when  we  were  permitted  to  pull 
the  young  corn  for  roasting  ears.  Still  more  so 
when  it  had  acquired  sufficient  hardness  to  be 
made  into  johnny  cakes  by  the  aid  of  a  tin 
grater."1 

The  agriculture  of  the  North  has  gradually 
been  transformed  until  now  the  commercial  ele- 
ment dominates.  Manufacturing  was  for  a  long 
time  a  household  industry  carried  on  by  nearly 
every  farm  family,  but  in  the  course  of  time  more 
and  more  of  this  work  was  turned  over  to  those 
who  made  a  specialty  of  manufactures.  The 
swift  streams  of  New  England  were  harnessed, 
and  made  to  turn  the  wheels  of  industry.  This 
movement  followed  but  slowly  the  path  of  the 
pioneer  farmer,  yet  in  the  course  of  time  the 
older  parts  of  the  North  became  noted  for  their 
manufactures.  With  the  development  of  manu- 
factures, a  market  has  grown  up  for  the  ordinary 
forms  of  farm  produce,  such  as  wheat,  oats,  pork, 
beef  and  dairy  products.  As  markets  have  de- 
veloped and  the  means  of  transportation  have  been 

1  Reverend  Joseph  Doddridge,  Hart's  American  History 
Told  by  Contemporaries,  Vol.  II,  p.  387. 

53 


AGRICULTURAL    ECONOMICS 

improved,  the  old  self-sufficing  agriculture  has 
been  gradually  transformed  into  a  commercial 
economy,  until  the  remnants,  only,  of  the  old  sys- 
tem are  now  to  be  found. 

From  the  standpoint  of  the  farmer,  the  guiding 
principle  in  the  organization  of  commercial  agri- 
culture is  to  seek  the  largest  net  profit ;  but  there 
is  another  point  of  view  than  that  of  the  farmer. 
Since  not  only  the  farmer,  but  every  one  else  is 
interested  in  agriculture,  the  question  arises,  are 
the  interests  of  the  country  as  a  whole  best  con- 
served when  each  farmer  follows  tenaciously  his 
own  self-interest  and  succeeds  in  winning  the 
largest  net  profits  in  return  for  the  effort  which 
he  expends  in  agricultural  production?  There 
may  be  at  certain  points,  a  conflict  between  the 
narrower  and  the  broader  interests.  In  this  case 
we  are  confronted  with  the  problem  of  deter- 
mining whether  the  individual  or  the  general 
interest  should  be  promoted.  To  the  extent  that 
the  greatest  good  to  the  greatest  number  demands 
that  the  general  or  social  interests  be  conserved, 
it  falls  within  the  domain  of  our  subject  to  pro- 
pose institutions  which  will  limit  the  free  action 
of  individuals  in  such  a  manner  as  to  promote  the 
highest  interests  of  society  as  a  whole. 

But  while  human  welfare  or  the  greatest  good 
to  the  greatest  number  has  long  been  recognized 
as  the  standard  by  which  every  law  or  custom 
should  be  accepted  or  rejected,  this  principle  is 

54 


ORGANIZATION    OF    THE    FARM 

so  abstract  that  men  may  be  fully  agreed  upon 
its  acceptance  as  their  standard,  and  yet  hold 
exactly  opposite  opinions  as  to  the  desirability  of  a 
particular  measure.  The  statesman  needs  a  more 
concrete  standard  which  may  be  used  with  safety 
in  his  efforts  to  set  proper  limits  to  the  free  action 
of  farmers  and  of  those  with  whom  they  have 
economic  relations,  in  the  pursuance  of  their 
daily  toils. 

The  highest  value  of  the  productions  of  a  coun- 
try has  been  set  forth  as  a  practical  economic  ideal 
for  the  statesman.  It  has  been  said  that  "the 
prosperity  of  a  nation  is  in  proportion  to  the  value 
of  its  productions."1  This  is  the  economic  ideal 
which  was  set  forth  by  their  leaders  as  the  aim 
and  the  end  of  the  Patrons  of  Husbandry  in  their 
efforts  to  promote  the  interests  of  agriculture. 

To  this  principle,  as  an  economic  ideal,  it  might 
be  objected  that  legislation  may  be  of  such  a  char- 
acter as  to  increase  the  value  of  the  agricultural 
productions  of  a  country  and  at  the  same  time  not 
improve  the  economic  well-being  of  the  people  of 
the  country  as  a  whole.  It  is  quite  conceivable, 
for  example,  that  duties  on  imports  may  be  so 
levied  as  to  increase  the  total  value  of  the  agricul- 
tural products  of  a  country,  without  increasing 
the  prosperity  of  the  nation  as  a  whole. 

It  is  necessary,  also,  in  order  that  this  national 

1See  the  Preamble  of  the  Constitution  of  the  Patrons  of 
Husbandry. 

55 


AGRICULTURAL    ECONOMICS 

ideal  shall  be  attained,  that  the  labor  and  the 
capital  of  a  country  be  properly  distributed  among 
the  various  lines  of  economic  activity.  The  labor 
and  the  capital  of  a  nation  should  be  so  distrib- 
uted among  the  various  industries  that  the  portion 
of  these  factors  which  is  employed  under  the  most 
unfavorable  circumstances  shall  be  equally  pro^ 
ductive  in  all  industries.  The  necessity  of  this 
proper  adjustment  of  the  productive  forces  should 
ever  be  kept  in  mind  in  the  discussion  of  the 
movements  of  population  from  country  to  city  or 
vice  versa. 

When  the  productive  forces  are  properly  dis- 
tributed among  the  various  lines  of  production, 
and  where  the  relative  values  of  products  are  not 
to  be  directly  affected,  it  would  seem  that  a  just 
and  practical  ideal  to  be  held  in  mind  when  pass- 
ing judgment  upon  the  institutions  which  limit 
and  define  the  rights  of  the  farmers  in  their  rela- 
tions to  each  other,  to  their  landlords,  to  laborers 
which  they  employ,  and  to  those  to  whom  they 
sell  their  products,  would  be  the  highest  value  of 
the  agricultural  productions  of  a  country. 

We  wish  to  mark  out  clearly  trie  distinction 
between  the  social  ideal  and  the  ideal  of  the  indi- 
vidual. The  individual  seeks  the  largest  net 
profits.  He  desires  to  have  that  share  of  the 
,  product  which  is  left  to  him,  after  paying  what  is 
necessary  to  engage  the  other  factors  of  produc- 
tion, as  large  as  possible.  Where  the  personal 

56 


ORGANIZATION    OF    THE    FARM 

interest  of  the  farmer  does  not  extend  to  all 
of  the  factors  of  production,  conflicting  interests 
are  certain  to  arise,  as  between  the  landlord  and 
the  tenant,  or  the  employer  and  the  employee. 
While  the  farmer  is  interested,  personally,  in  hav- 
ing his  own  share  of  the  produce  large  in  propor- 
tion to  the  efforts  which  he  puts  forth,  the  states- 
man should  be  interested  equally  in  having  the 
returns  to  all  the  factors  of  production  as  large 
as  possible.  It  is,  therefore,  not  the  return  to 
any  one  factor  in  particular,  but  the  sum  of  the 
returns  to  all  the  factors  which  should  be  of  vital 
interest  to  the  statesman.  With  the  limitations 
which  have  been  suggested,  the  highest  long-time- 
average  value  of  the  total  product  of  this  industry, 
is,  then,  the  goal,  when  agriculture  is  viewed  from 
the  standpoint  of  the  nation  as  a  whole. 

It  will  be  our  purpose  in  the  following  chapters, 
to  outline  the  economic  principles  which  the 
farmer  follows  when  intelligently  seeking  to  win 
the  largest  possible  net  profits;  and  also  to  note 
those  circumstances  under  which  the  winning  of 
the  largest  net  profits  on  the  part  of  the  farmer 
does  not  result  also  in  the  highest  value  of  the 
agricultural  productions  of  the  country  as  a 
whole.  It  will  be  attempted,  further,  to  outline 
some  of  the  methods  which  have  been  employed 
by  public  authority  in  its  attempts  to  promote  the 
agricultural  interests,  and  to  discuss  the  institu- 
tions which  are  essential  to  a  proper  adjustment 

57 


AGRICULTURAL    ECONOMICS 

of  the  economic  relations  of  those  engaged  in 
this  industry. 

LITERATURE 

Theodor  Freiherr  von  der  Goltz,  Leitfaden  der  landwirt- 
schaftlichen  Betricbslehre. 

Frangois  Bernard,  Les  Systemes  de  Culture. 

Weeden,  W.  B.,  Economic  and  Social  History  of  New  Eng- 
land. 

P.  A.  Bruce,  Economic  History  of  Virginia  in  the  i?th 
Century. 

Adam  Smith,  Wealth  of  Nations,  Book  I,  Chapters  I,  II, 
and  III. 

Ely,  R.  T.,  Outlines  of  Economics,  Book  III,  Part  I,  Chap- 
ter I. 


CHAPTER  V 

THE  ORGANIZATION  OF  THE  FARM.  THE  SELEC- 
TION OF  LAND,  LIVE  STOCK  AND  EQUIPMENT;  THE  CHOICE 
OF  CROPS;  THE  PLACE  OF  ANIMAL  HUSBANDRY  IN  THE 
ECONOMY  OF  THE  FARM. 

Section  I.  The  selection  of  land  and  capital- 
goods,  or,  the  grades  of  the  factors  of  production 
which  should  be  brought  together. — With  the 
three  factors  of  production  to  be  organized  in 
such  a  manner  as  will  enable  him  to  win  the 
largest  net  profits,  the  first  problem  before  the 
farmer  is  the  selection  of  land,  live  stock  and 
equipment.  It  has  been  seen  that  all  the  factors 
vary  in  productivity,  and  the  question  arises  as 
to  which  grade  of  land  a  given  farmer  should 
select  for  his  agricultural  operations,  and  which 
grade  of  capital-goods  he  should  employ. 

The  proportions  in  which  the  factors  of  pro- 
duction should  be  brought  together  will  be  dis- 
cussed in  the  next  chapter.  There  we  shall  have 
to  do  with  the  quantities  of  labor  and  capital- 
goods  which  should  be  expended  upon  a  given 
area  of  land,  the  quantity  of  labor  which  should 
be  associated  with  a  given  quantity  of  capital- 
goods,  and  the  quantity  of  land,  labor  and  capital- 

59 


AGRICULTURAL    ECONOMICS 

goods  which  should  be  brought  under  one  manL 
agement  in  order  that  the  best  results  shall  be 
attained;  but  in  this  chapter  quantities  or  pro- 
portions will  be  disregarded,  and  our  attention 
will  be  fixed  upon  the  qualities  of  these  factors, 
with  a  view  to  determining  which  grades  of  land, 
laborers,  horses,  machines,  etc.,  should  be  asso- 
ciated together. 

When  viewed  from  the  standpoint  of  the  high- 
est value  of  the  productions  of  a  country  it  be- 
comes apparent  that  the  farmers  who  are  qualita- 
tively most  efficient,  should  employ  the  most  pro- 
ductive grades  of  capital-goods  upon  the  most 
productive  land.  A  mathematical  illustration  of 
this  is  as  follows.  Let  the  grades  of  farmers  be 
represented  by  the  figures  2,  4,  and  6 ;  the  grades 
of  capital-goods  by  the  figures  i,  3,  and  5 ;  and  the 
grades  of  land  by  the  figures  8,  10,  and  12.  Hav- 
ing in  mind  that  a  given  grade  of  land,  for  exam- 
ple, will  yield  twice  as  much  product  in  value  if 
farmed  by  the  man  whose  efficiency  is  represented 
by  figure  four  as  it  will  if  managed  by  the  one 
whose  efficiency  is  represented  by  figure  two,  etc., 
for  the  other  grades  and  factors,  let  the  reader 
try  to  multiply  these  figures  together,  taking  one 
figure  from  each  group,  in  such  a  manner  that  the 
sum  of  the  products  will  be  the  greatest  possible. 
Note  that  when  the  highest  from  each  group  are 
associated  together,  and  the  medium,  and  again 
the  lowest  are  in  turn  associated  together  the  sum 

60 


ORGANIZATION    OF    THE    FARM 

of  the  products  will  be  the  greatest  possible,  as 
for  example,  (2x3x12)  +  (4x5x10)  +  (8xix6)= 
only  320,  whereas  (2x1x8)  + (4x3x10) +  (6x5x 
12)  =496,  which  is  the  maximum  product  which 
can  be  obtained. 

The  question  arises  at  once  as  to  the  willing- 
ness of  the  farmers  to  select  land  according  to 
this  principle.  There  is  no  apparent  reason  why 
the  best  farmers  should  object  to  using  the  best 
land  and  the  best  live  stock  and  equipment,  but 
it  is  clear  that  the  least  efficient  farmer  could  pro- 
duce larger  crops  upon  the  more  productive 
grades  of  land  and  by  using  the  more  productive 
forms  of  capital-goods  than  he  can  on  the  less 
productive  land  and  by  using  the  less  productive 
horses  and  tools  to  which  this  formula  assigns 
him.  The  fact  which  reconciles  the  less  efficient 
farmers  to  the  use  of  the  lower  grades  of  the  fac- 
tors of  production,  is  the  competitive  price  which 
must  be  paid  for  the  use  of  the  higher  grades, 
For  example,  the  farmers  who  are  qualitatively 
more  efficient  can  pay  more  for  the  use  of  the 
more  productive  land  than  their  less  efficient  com- 
petitors can  possibly  pay,  and  yet  at  these  higher 
rents  these  more  efficient  farmers  find  it  to  their 
interest  to  select  the  higher  grades  of  land.  This 
proposition  will  be  further  developed  in  the  chap- 
ter on  the  distribution  of  wealth,  where  it  will  be 
shown  more  clearly  why  it  is  that  the  interest  of 

61 


AGRICULTURAL    ECONOMICS 

the  individual  farmers  harmonizes  with  that  of 
society  as  a  whole  in  this  regard. 

After  the  student  has  followed  through  the 
further  development  of  the  subject  this  principle 
will  not  seem  so  abstract  as  it  may  appear  on  the 
surface.  It  will  then  be  seen  that  if  a  farmer  is 
only  able  to  make  a  living  on  land  with  a  low  de- 
gree of  productivity,  that  the  chances  of  his  mak- 
ing a  living  and  paying  the  rent  on  the  better 
grades  of  land  where  the  rent  will  be  higher,  are 
very  poor  indeed.  On  the  other  hand  if  a  farmer 
can  make  a  profit  on  the  low  grade  land,  which 
enables  him  to  lay  aside  something  each  year,  the 
chances  are  that  such  a  farmer  can  increase  his 
savings  by  selecting  more  productive  land  and 
paying  a  higher  rent  for  its  use.  The  writer  has 
known  farmers  who  succeeded  in  making  a  liv- 
ing on  cheap  land,  but  who  utterly  failed  to  make 
the  rent  when  they  moved  to  better  land,  whereas 
there  were  other  farmers  who  could  pay  the  rent 
for  the  more  productive  land,  and  have  more 
money  left  at  the  end  of  the  year  than  they  could 
possibly  have  had  in  case  they  had  farmed  the 
less  productive  land  which  could  be  had  for  a 
much  lower  rent. 

This  process  of  shifting  the  farmers  who  are 
qualitatively  less  efficient  to  the  less  productive 
land  operates  more  or  less  automatically.  The 
writer  once  knew  a  farmer  who  paid  a  cash  rent 
for  a  farm  of  one  hundred  acres  of  good  land. 

62 


f 

ORGANIZATION    OF    THE    FARM 

Year  after  year  he  scarcely  kept  even,  and  would 
not  have  been  able  to  make  both  ends  meet  had 
he  not  engaged  in  other  work  during  a  part  of  the 
year.  Another  farmer  offered  more  for  the  use 
of  the  land  than  was  being  paid,  and  the  old 
tenant  gladly  gave  up  the  place  rather  than  pay 
any  more  rent  than  he  was  paying.  The  second 
farmer  has  paid  the  higher  rent  and  saved  money 
year  by  year,  and  at  the  same  time  the  first  men- 
tioned farmer  moved  to  cheaper  land  where  he 
has  been  able  "to  make  a  living  and  even  a  little 
more,  and  has  not  felt  so  keenly  the  burden  of 
the  rent. 

It  is  a  matter  of  common  observation  that  the 
best  farm  land  is  usually  occupied  by  intelligent 
and  thrifty  farmers,  whereas  the  less  desirable 
land  is  usually  occupied  by  men  not  so  well  en- 
dowed by  nature  to  put  the  land  to  its  highest 
use,  and  hence  who  are  not  capable  of  compe- 
ting for  the  more  productive  grades  of  land.  The 
writer's  attention  was  called  to  this  fact,  with 
regard  to  the  distribution  of  the  population  over 
i  the  different  grades  of  land,  some  years  ago,  both 
by  Professor  Turner  and  by  Professor  Van  Hise 
of  the  University  of  Wisconsin ;  but  it  was  later, 
in  a  study  of  the  influence  of  variations  in  the 
qualitative  efficiency  of  farmers  upon  the  amount 
of  rent  that  would  be  paid  for  the  use  of  farm 
land  under  competitive  conditions,  that  the  eco- 
nomic principle  which  explains  this  fact  was  dis- 
covered. 63 


AGRICULTURAL    ECONOMICS 

It  will  be  shown,  in  the  chapter  on  distribution, 
that  the  net  profit  which  any  farmer  can  make  will 
vary  with  the  grade  of  the  land ;  that  the  farmer 
who  has  the  highest  degree  of  qualitative  efficiency 
can  make  much  more  than  a  living  on  land  of  any 
grade,  but  that  he  can  make  the  largest  net  profit 
on  the  most  productive  land  after  outbidding  all 
competitors  for  its  use.  It  will  be  shown  that 
the  farmer  whose  degree  of  qualitative  efficiency 
is  half  \vay  between  the  highest  and  the  lowest, 
can  make  a  living  on  many  of  the  different  grades 
of  land,  but  that  owing  to  the  higher  rents  which 
the  more  efficient  are  willing  to  pay  for  the  better 
grades  of  land,  he  can  secure  the  largest  net  profit 
by  employing  that  grade  of  land  which  corre- 
sponds to  his  degree  of  qualitative  efficiency. 
And  finally  it  will  be  shown  that  the  farmer 
with  the  lowest  degree  of  qualitative  efficiency 
can  hope  to  make  a  living  only  on  the  least  pro- 
ductive land.  The  same  principle  holds  with 
regard  to  the  selection  of  capital-goods,  and  also 
of  laborers  where  laborers  are  employed. 

Attention  has  been  called  to  the  variation  in 
the  efficiency  of  the  farmers,  but  it  should  be 
noted  also  that  the  efficiency  of  a  given  farmer 
may  be  different  in  the  various  branches  of  the 
agricultural  industry.  A  man  can  usually  do  best 
that  for  which  he  has  a  natural  liking  or  taste. 
Each  farmer  should  decide,  therefore,  which 
branch  of  agriculture  he  can  follow  to  best  advan- 

64 


ORGANIZATION    OF    THE    FARM 

tage  and  then  select  the  grade  of  land  and  capital- 
goods,  suited  to  that  branch  of  agriculture,  which 
correspond  to  his  degree  of  qualitative  efficiency 
as  a  producer  in  that  branch  of  the  industry,  for 
such  a  choice  will  enable  him  to  win  the  largest 
net  profit. 

Section  II.  The  selection  of  crops  and  the 
organisation  of  the  -field-system.  —  When  the  land 
is  selected  on  which  the  farmer  is  to  carry  on  his 
agricultural  operations,  the  next  important  ques- 
tion which  arises  pertains  to  the  selection  of  the 
crops  which  are  to  find  a  place  in  the  field-system. 
The  Roman  agricultural  writer,  Pliny  the  elder, 
quotes  a  maxim  which  was  said  to  have  been 
handed  down  from  the  ancients,  to  the  effect  that 
he  is  a  bad  farmer  indeed  who  will  buy  anything 
which  he  can  produce  upon  his  own  farm.1  But 
Albrecht  Thaer,  the  leading  German  agriculturist 
of  one  hundred  years  ago,  and  perhaps  the  great- 
est agriculturist  Germany  has  produced,  taught 
the  farmers  of  his  generation  to  produce  nothing 
for  themselves  which  they  could  to  better  advan- 
tage purchase  upon  the  market.2  The  maxim 
quoted  by  Pliny  points  towards  the  self-sufficing 
economy  of  early  times  when  the  goal  of  the  hus- 
bandman was  the  direct  satisfaction  of  all  the 


1Bohn's  Classical  Library,  Natural  History  of  Pliny,  Vol. 
IV,  p.  16;  also  Dickson's  Husbandry  of  the  Ancients,  Vol. 
I,  p.  208. 

2Wilhelm  Korte,  Albrecht  Thaer,  Sein  Leben  und  Wirken, 
als  Arzt  und  Landwirth,  pp.  102-103. 


AGRICULTURAL    ECONOMICS 

wants  of  his  household;  but  Thaer  lived  at  a 
time  when  commerce  had  so  developed  and  indus- 
try had  become  so  diversified  that  production  for 
the  market  had  become  very  important.  The  fol- 
lowers of  Thaer  learned  to  select  those  crops 
which  would  enable  them  to  win  the  largest  net 
profits,  and  to  exclude  all  others  from  the  field- 
system. 

This  process  of  selecting  the  crops  which  en- 
able the  farmer  to  win  the  largest  net  profits  is 
an  important  factor  in  determining  the  geograph- 
ical distribution  of  farm  crops  in  modern  times. 
While  all  plants  will  not  thrive  under  the  same 
conditions,  there  are  usually  several  species  pres- 
ent to  compete  for  the  use  of  each  piece  of  land. 
When  Nature  is  left  to  herself,  the  plants  which 
are  best  fitted  for  this  competitive  struggle  sur- 
vive and  occupy  the  land;  but  when  man  inter- 
venes the  useful  plants  are  given  especial  care 
while  the  plants  which  are  harmful  or  of  no  use 
are  destroyed. 

Under  the  self-sufficing  economy  of  earlier 
times,  all  the  useful  plants  which  could  be  made 
to  thrive  were  cultivated  on  each  farm.  The 
greater  the  variety  of  crops  which  each  husband- 
man could  produce  the  greater  the  degree  of  his 
well-being,  for  each  household  was  a  little  eco- 
nomic world  striving  to  subsist  upon  the  imme- 
diate products  of  its  own  industry. 
'  But  under  the  regime  of  modern  commercial  agri- 

66 


ORGANIZATION    OF    THE    FARM 

culture,  where  each  farmer  produces  primarily  for 
the  city,  national,  or  world  market,  and  buys  upon 
the  market  the  majority  of  the  goods  he  consumes, 
his  well-being  depends  less  upon  the  variety  of  his 
own  productions,  and  more  upon  his  power  to 
command  the  desired  commodities  upon  the  mar- 
ket. This  power  does  not  depend  upon  the  va- 
riety, but  upon  the  cost,  quantity,  and  price  of 
the  articles  which  he  takes  to  the  market.  Cost, 
or  cheapness  of  production,  is  not  the  one  deter- 
mining factor ;  neither  is  the  quantity  of  the  prod- 
uct. The  selling  price  would  also  be  a  poor  guide 
in  itself.  But  when  the  cost  of  producing  an 
article,  the  quantity  which  one  man  can  produce, 
the  capacity  of  the  crop  to  fit  itself  into  the  field- 
system,  and  the  farm  price  of  the  product,  are  all 
taken  together,  it  will  be  found  that,  with  prices 
as  they  are  at  a  given  time,  some  crops  will  net 
the  farmer  a  handsome  profit,  while  others  can 
be  grown  only  at  a  loss.  The  economic  well- 
being  of  the  modern  farmer  depends,  then,  upon 
his  capacity  to  select  and  produce  that  crop  or 
combination  of  crops  which,  one  year  with  an- 
other, will  enable  him  to  win  the  largest  net 
profit. 

The  organization  of  the  farm  is  essentially 
different  from  that  of  the  factory.  In  mechanical 
pursuits  it  is  the  common  thing  for  each  man  to 
devote  all  of  his  time  throughout  the  year  to  the 
production  of  that  one  article  or  class  of  articles 

67 


AGRICULTURAL    ECONOMICS 

which  he  can  produce  to  the  best  advantage.  In 
agriculture,  however,  the  production  of  any  one 
crop  requires  the  attention  of  the  farmer  for  only 
a  portion  of  the  year,  and  various  crops  demand 
his  attention  at  different  seasons,  so  that  his  labor, 
horses,  and  machines  are  usually  employed  more 
economically  in  a  system  of  diversified  farming 
than  in  a  single  crop  system,  even  if  the  crop  need- 
ing attention  at  one  time  is  less  profitable  than 
that  requiring  attention  at  another  time. 

The  crops  which  require  attention  at  the  same 
time  of  the  year  may  be  looked  upon  as  a  group 
of  competing  crops.  Those  crops  which  require 
cultivation  for  six  or  eight  weeks  during  the  early 
period  of  their  growth,  such  as  maize,  cotton, 
tobacco,  potatoes,  sugar  beets,  etc.,  may  be  classed 
together  as  a  group  of  competing  crops,  because 
they  compete  for  the  attention  of  the  farmer, — for 
his  labor,  horses,  tools  and  machinery.  The  win- 
ter grains,  rye  and  winter  wheat,  or  the  spring 
grains,  oats,  barley,  and  spring  wheat,  may  be 
given  as  other  groups.  These  separate  groups 
may  be  called  non-competing  groups,  because  the 
members  of  one  group  require  the  attention  of 
the  farmer  at  a  different  time  than  do  the  mem- 
bers of  the  other  groups.  For  example,  maize, 
cotton,  etc.,  do  not  compete  with  oats,  barley,  etc. 

The  farmer  who  seeks  to  use  his  labor  and  capi- 
tal to  the  best  advantage  should  select  from  each 
group  of  competing  crops  that  one  which  will  add 

68 


ORGANIZATION    OF    THE    FARM 

the  most  to  the  farmer's  net  profit  and  should 
introduce  as  many  non-competing  crops  into  the 
field-system  as  will  add  sufficient  to  his  net  profit 
to  pay  him  for  his  trouble.  When  this  principle 
is  followed  it  will  often  happen  that  of  two  non- 
competing  crops  in  the  field-system,  one  will  yield 
a  larger  net  profit  than  the  other.  Yet  when  the 
year's  accounts  are  balanced,  it  will  be  found  that 
the  total  net  profit  of  the  farmer  is  greater  when 
both  crops  are  cultivated  than  when  but  the  one 
is  grown,  even  if  the  one  is  less  profitable  than 
the  other,  for  each  crop  represents  the  most  prof- 
itable use  to  which  the  labor,  horses,  tools  and 
machinery  can  be  put  at  the  given  time,  and  if 
not  used  in  that  way  they  must  be  put  to  a  less 
productive  use  or  to  no  use  at  all. 

But  of  two  competing  crops,  only  the  more 
profitable  one  should  be  produced.  Take  maize 
and  sugar  beets,  for  example,  in  that  part  of  the 
United  States  where  the  sugar-beet  region  lies 
within  the  "corn  belt."  Indian  corn  and  beets 
require  the  attention  of  the  farmer  at  the  same 
time  of  year  and  if  the  one  crop  increases  the 
other  must  decrease.  Hence  beets  must  here 
prove  equally  profitable,  that  is  they  must  add  as 
much  as  maize  to  the  farmer's  total  net  profit, 
before  they  can  be  cultivated  without  loss.  The 
beets  may  yield  the  larger  net  profit  per  acre,  and 
yet  prove  less  profitable  to  the  farmer  because  he 
cannot  operate  so  many  acres  of  beets  as  of 

69 


AGRICULTURAL    ECONOMICS 

maize.  In  order  to  arrive  at  the  total  net  profit 
which  he  can  win  from  the  production  of  a  given 
crop,  the  net  profit  per  acre  must  be  multiplied  by 
the  number  of  acres  which  the  farmer  can  operate. 

Cotton  and  maize  are  competitors  in  the  South. 
For  many  years  after  the  Civil  War  cotton 
yielded  a  much  greater  net  profit  to  the  farmers 
than  did  maize.  As  a  result,  maize  was  little 
grown  in  the  South,  the  supply  being  drawn  from 
the  North  where  cotton  does  not  thrive.  To- 
ward the  close  of  the  last  century  the  profits  of 
cotton  growing  considerably  declined  and  maize 
production  took  a  more  important  place  in  the 
field-system  of  the  South. 

When  the  above  principle  is  followed  in  the 
organization  of  the  field-system,  it  will  not  be 
true,  necessarily,  that  each  crop  will  be  grown 
where  the  facilities  for  its  production  are  the 
greatest;  for  it  may  happen,  for  example,  that  in 
the  region  where  the  facilities  for  the  production 
of  tobacco  are  the  best,  sugar  beets  will  yield  a 
larger  net  profit  than  tobacco,  in  which  case  the 
latter  crop  might  well  be  excluded  from  the  field- 
system  in  the  very  region  where,  aside  from  the 
element  of  rent,  it  can  be  produced  most  cheaply. 

It  is  evident  that  changes  in  the  relative  value 
of  farm  products  will  necessitate  changes  in  the 
organization  of  the  field-system.  If  the  price  of 
one  of  two  competing  crops  should  rise  more  rap- 
idly than  that  of  the  other,  this  might  result  in  a 

70 


ORGANIZATION    OF    THE    FARM 

change  from  the  one  crop  to  the  other.  Changes 
of  this  kind  often  come  about  in  certain  districts, 
because  of  the  growth  of  a  great  industrial  and 
commercial  center  in  that  part  of  the  country. 
Take,  for  example,  the  farms  located  within  a  few 
miles  of  Chicago.  Seventy  years  ago  there  was 
practically  no  home  market,  and  the  farmers,  to 
the  extent  that  they  produced  for  the  market  at 
all,  produced  those  crops  which  when  shipped  to 
the  East  would  yield  the  largest  net  profit ;  but  in 
the  meantime  "the  development  of  a  market  close 
at  hand  has  greatly  influenced  the  organization 
of  these  farms.  The  local  demand  for  milk  and 
for  garden  produce  has  made  it  most  profitable 
for  the  farmers  to  devote  themselves  more  or  less 
•exclusively  to  dairying  and  market  gardening. 
This  is  due  to  the  well  known  fact  that  location 
with  respect  to  the  market  has  a  greater  influence 
upon  the  price  of  some  commodities  than  upon 
that  of  others;  that  is,  a  dollar's  worth  of  one 
commodity  can  be  shipped  more  cheaply  or  in 
better  condition  than  can  a  dollar's  worth  of  an- 
other commodity.  Thus  it  is  that  the  farmer 
must  ever  be  alert  to  the  changes  which  are  going 
on  in  the  whole  industrial  world  if  he  would  per- 
fectly adjust  his  production  in  such  a  manner 
as  will  bring  the  largest  net  profits. 

Fluctuations  in  land  rents,  without  any  change 
in  the  relative  value  of  the  products,  may  necessi- 
tate the  reorganization  of  the  field-system.  Sup- 

71 


AGRICULTURAL    ECONOMICS 

pose,  for  example,  that  the  rent  of  a  given  piece 
of  land  is  three  dollars  per  acre,  and  that  the  net 
profit  per  acre  is  five  dollars  when  the  land  is  de- 
voted to  maize,  and  that  the  net  profit  is  twenty 
dollars  per  acre  when  the  land  is  devoted  to  sugar 
beets;  but  that  the  farmer  can  operate  thirty-five 
acres  of  maize  and  only  seven  acres  of  beets. 
Then  he  could  win  one  hundred  and  seventy-five 
dollars  net  profit  by  producing  maize,  and  only 
one  hundred  and  forty  dollars  by  producing 
beets.  But,  suppose  the  rent  of  the  land  should 
rise  to  five  dollars  per  acre,  without  any  change  in 
the  prices  of  the  products  or  in  the  costs  of  pro- 
duction. The  profits  per  acre  of  maize  would 
then  be  three  dollars,  and  that  of  an  acre  of  beets 
would  be  eighteen  dollars,  so  that,  with  the  same 
proportions  as  to  the  number  of  acres  which  the 
farmer  can  operate  of  these  two  crops,  the  total 
net  profit  which  he  could  win  from  the  production 
of  maize  would  be  reduced  to  one  hundred  and 
five  dollars,  while  that  from  the  beets  would  have 
been  reduced  to  one  hundred  and  twenty-six  dol- 
lars only.  In  this  hypothetical  case  the  rise  in 
the  rent  would  result  in  a  subtraction  of  only 
fourteen  dollars  from  the  total  profits  of  the  beet 
crop,  while  it  would  result  in  a  reduction  of  the 
profits  on  maize  of  seventy  dollars,  so  that  the 
crop  which  was  the  more  profitable  before  the 
rise  in  the  rent  would  become  the  less  profitable 
as  a  result  of  the  rise  in  rent. 

72 


ORGANIZATION    OF    THE    FARM 

It  is  a  well  recognized  fact  that  the  different 
crops  make  different  demands  upon  the  soil. 
For  this  reason  the  crops  which  are  associated  to- 
gether in  the  systems  of  rotation  should  be  such 
as  will  make  supplementary  demands  upon  the 
soil's  elements  of  fertility.  This  in  itself,  how- 
ever, is  not  a  safe  guide  in  determining  which 
plants  should  be  introduced  into  the  field-system ; 
for  it  might  lead  to  the  cultivation  of  the  less 
profitable  of  two  competing  crops  and  thus  reduce 
the  farmer's  total  net  profit.  Yet  it  should  ever 
be  kept  in  mind  that  if  one  of  two  competing 
crops  exhausts  the  soil  while  the  other  adds  to  its 
fertility,  this  must  be  taken  into  account  when 
calculating  the  net  profit  which  these  crops  can 
be  made  to  yield.  The  crops  being  chosen  which 
will,  one  year  with  another,  enable  the  farmer  to 
win  the  largest  net  profit,  they  should  be  arranged 
in  the  field-system  in  such  a  manner  as  best  to  sup- 
plement each  other  in  their  demands  upon  the  soil. 

A  comparative  study  of  the  crops  and  field- 
systems  of  Europe  and  America  will  throw  some 
light  upon  the  situation  in  America.  A  three- 
field  system  of  crop  rotation  prevailed  through- 
out Europe  during  the  Middle  Ages.  Under  this 
system,  the  arable  land  was  divided  into  three 
parts.  One  part  was  sown  with  winter  grain, 
one  part  with  spring  grain,  and  the  third  part  was 
fallowed.  The  fallowed  field  was  cultivated  care- 
fully to  destroy  the  weeds  and  to  bring  the  soil 

73 


AGRICULTURAL    ECONOMICS 

into  good  tilth.  The  field  which  was  fallowed 
one  year  was  sown  to  winter  grain  the  next,  and 
to  spring  grain  the  following  year,  so  that  each 
field  was  cleaned  of  weeds  and  brought  into  good 
tilth  every  third  year,  during  which  year  the  field 
yielded  no  product. 

This  system  was  in  very  general  use  through- 
out Europe  down  to  the  close  of  the  Eighteenth 
Century,  but  by  that  time  the  industrial  and  com- 
mercial population  was  making  such  demands  for 
agricultural  products  that  the  more  intelligent 
farmers  began  to  think  it  too  great  a  waste  to  cul- 
tivate a  third  of  the  arable  land  each  year  with 
no  crop  growing  upon  it.  A  general  search  was 
made  for  a  crop  which  could  be  grown  in  place 
of  the  bare  fallow,  and  at  the  same  time  allow  the 
soil  to  be  cleaned  of  weeds  and  cultivated  prepara- 
tory for  the  sowing  of  grain.  Indian  corn  had 
already  been  introduced  in  the  countries  along 
the  Mediterranean,  but  unfortunately  this  crop, 
which  is  the  one  grain  crop  which  can  be  culti- 
vated successfully  while  growing,  was  ruled  out 
by  the  climate,  in  the  greater  part  of  Europe,  so 
that  turnips,  potatoes,  and  beets  were  resorted  to. 
Besides  the  root  crops,  clover  was  introduced, 
and  the  rotation  changed  into  a  four-course  sys- 
tem in  which  roots,  summer  grain,  clover,  and 
winter  grains  succeeded  each  other  in  the  order 
given.  On  heavy  clay  soils  where  the  root  crops 
would  not  thrive  beans  sometimes  took  the  place 

74 


ORGANIZATION    OF    THE    FARM 

of  the  root  crop  in  this  four-course  system.  Dur- 
ing the  last  quarter  of  the  Eighteenth  Century  and 
the  first  half  of  the  Nineteenth,  this  four-course 
system  gradually  replaced  the  old  three-field  sys- 
tem and  its  bare  fallow.  The  root  crops  came  to 
be  called  "fallow  crops"  because  they  were  looked 
upon  as  incidental  to  the  fallowing  of  the  land 
in  preparation  for  the  grain  crops.  The  grains 
continued,  at  least  until  1875,  to  be  the  most  valu- 
able crops. 

Since  the  fall  in  the  price  of  cereals,  about 
thirty  years  ago,  the  European  field-system  has 
been  quite  upset.  Those  articles  which  will  not 
stand  long  shipment,  such  as  milk,  vegetables, 
etc.,  prove  most  profitable,  because  foreign  counu 
tries  cannot  compete  so  successfully  upon  the 
European  markets.  As  a  result  grain  land  has, 
in  many  instances,  been  converted  into  pastures. 
A  good  example  of  this  is  found  in  eastern  Eng- 
land where  many  old  wheat  fields  have  been  con- 
verted into  permanent  pastures  for  dairy  cows. 
The  production  of  green  fodders  for  cattle  has 
proved  relatively  more  profitable  in  recent  years 
than  formerly.  Truck  farming  has  been  rapidly 
developed.  In  general,  the  tendency  has  been  for 
the  farmers  to  disregard  all  systems  of  crop  rota- 
tion and  produce  such  crops  as  will  enable  them  to 
secure  the  greatest  net  profit.  Commercial  fer- 
tilizers are  generally  used,  so  that  it  is  possible 
to  adjust  the  chemical  content  of  the  soil  to  the 

75 


AGRICULTURAL    ECONOMICS 

demands  of  the  plants  instead  of  trying  to  adjust 
the  plants,  by  means  of  crop  rotation,  to  the 
chemical  content  of  the  soil. 

The  old  three-field  system  was  the  rule  in 
northern  and  western  Europe  during  the  first  two 
centuries  of  American  colonization,  yet  the  bare 
fallow  never  became  permanently  established  in 
the  American  colonies.  The  colonists  were,  from 
the  beginning,  well  provided  with  valuable  crops, 
which  could  be  cultivated  while  growing.  In- 
dian corn  and  tobacco  made  the  bare  fallow  un- 
necessary and  practically  unknown  in  this  country 
long  before  "fallow  crops"  were  generally  intro- 
duced in  northwestern  Europe.  And  while  our 
country  has  greatly  expanded,  cotton,  maize  and 
tobacco  have  continued  to  make  fallowing  unnec- 
essary in  most  parts  of  the  United  States.  In 
parts  of  Canada,  and  in  the  United  States  along 
the  northern  border,  along  the  Pacific  coast,  and 
on  the  high  table  lands  of  the  plains  these  crops 
will  not  thrive,  and  the  conditions  with  regard  to 
available  crops  are  more  nearly  the  same  as  in 
western  Europe. 

Thus,  of  the  group  of  competing  crops  to  which 
Indian  corn,  cotton,  tobacco,  and  roots  belong, 
the  farmers  of  northwestern  Europe  have  only 
the  roots  to  select  from.  It  is  true  that  small 
areas  are  devoted  to  tobacco  in  northern  Ger- 
many, but  this  is  of  no  general  significance. 
Hence,  in  Germany,  for  example,  sugar  beets 

76 


ORGANIZATION    OF    THE    FARM 

have  only  to  prove  more  profitable  than  potatoes, 
which  are  grown  in  large  quantities  for  the  distil- 
leries, or  turnips,  and  fodder  beets,  which  are 
grown  for  the  feeding  of  cattle,  in  order  to  be 
introduced  with  profit  into  the  field-system. 
Whereas  in  the  "corn  belt"  of  the  United  States, 
sugar  beets  must  prove  as  profitable  as  maize 
before  there  is  any  economy  in  their  introduction. 

Under  these  circumstances  it  might  be  true 
that  the  facilities  for  producing  sugar  beets  were 
greater  in  the  "corn  belt"  of  the  United  States 
than  in  Germany;  and  yet  in  case  the  maize, 
which  cannot  be  grown  in  Germany,  should  prove 
more  profitable  than  the  beets  there  would  be  no 
economy  in  producing  beets  in  the  United  States, 
while  at  the  same  time  they  might  prove  profitable 
in  Germany,  in  spite  of  the  poorer  facilities,  be- 
cause of  the  lack  of  a  more  profitable  crop  to  take 
their  place  in  the  field  system.  This  example 
illustrates  the  principle  which  was  well  under- 
stood by  the  classical  economists,  namely,  that: 
"A  thing  may  sometimes  be  sold  cheapest,  by 
being  produced  in  some  other  place  than  that  at 
which  it  can  be  produced  with  the  smallest 
amount  of  labor  and  abstinence."1 

Section  HI.  The  place  of  animal  husbandry 
in  the  economy  of  the  farm. — The  importance  of 
live  stock  in  the  economy  of  the  farm  is  shown 

*John  Stuart  Mill,  Principles  of  Political  Economy,  Book 
III,  Chapter  XVII,  §  i. 

77 


AGRICULTURAL    ECONOMICS 

by  the  fact  that  on  June  i,  1900,  the  live  stock 
on  farms  represented  fifteen  per  cent,  of  the  total 
value  of  all  farm  property;  and  by  the  further 
fact  that  the  value  of  the  animal  products  sold  or 
consumed  by  the  farmers  in  1899,  represented 
forty-five  and  seven-tenths  per  cent,  of  the  total 
value  of  all  farm  products  sold  or  devoted  to  the 
personal  use  of  the  farmers  and  their  families 
during  the  same  year.  The  following  table 
shows  the  valuation  of  farm  property1  and  prod- 
ucts2 as  reported  in  the  twelfth  census. 

VALUATION  OF  FARM  PROPERTY  AND  PRODUCTS 


Kinds  of  Proper*                                        ti*  ce«aee 

Land  and  Improvements  ........  $16,674,690,247  81.3 

Live  stock  on  hand  June  ist  .....       3,078,050,041  15.0 

Implements  and  machinery  ......          761,261,550  3.7 


Total  value  of  farm  property..  .$20,514,001,838  100.0 
Kinds  of  Products 

Crops  not  fed  to  animals $2,045,187,485  54.3 

Animal  products 1,718,990,221  45.7 


Total  $3,764,177,706  loo.o 

QUANTITIES  AND  VALUES  OF  SPECIFIED  ANIMAL  PRODUCTS, 

AND  VALUES  OF  POULTRY  RAISED,  ANIMALS  SOLD,  AND 

ANIMALS  SLAUGHTERED  ON  FARMS  IN  i8993 

Products  Value 

Wool    $45,723,739 

Mohair  and  goat  hair 267,864 

Milk,  butter,  and  cheese 472,369,255 

1  Twelfth  Census,  Vol.  V,  pp.  xxix,  xxxii,  and  xxxvi. 
*Ibid.,  Vol.  V,  p.  cxxi. 

z  Ibid. 

78 
* 


ORGANIZATION    OF    THE  FARM 

Products  Value 

Eggs 144,286, 1 58 

Poultry  136,891,877 

Honey  and  wax 6,664,904 

Animals  sold 722,913,1 14 

Animals  slaughtered 189,873,310 


Total   $1,718,990,221 

The  value  of  crops  fed  to  stock,  in  1899,  was 
reported  as  $974,941,046,  or  32.3  per  cent,  of 
the  total  reported  value  of  all  crops  of  the  coun- 
try. These  crops  and  the  pastures  of  the  country 
formed  the  basis  for  the  production  of  the  $i,- 
718,990,221  worth  of  live  stock  products.  Of 
the  total  value  of  animal  products  sold  or  used, 
the  most  important  items  were  the  value  of  ani- 
mals sold  and  slaughtered,  which  was  $912,786,- 
424,  and  that  of  dairy  products,  which  was 
$472,369,255. 

There  are  certain  crops  such  as  cotton  and 
tobacco  which  are  always  intended  for  the  mar*- 
ket  in  their  native  form,  but  there  are  many  other 
crops,  such  as  the  grains  and  the  hay  and  forage 
crops,  which  may  be  sold  in  their  native  form 
or  transformed  by  the  farmer  into  animal  prod- 
ucts. The  farmer  has  ever  before  him,  therefore, 
the  problem  of  determining  whether  the  largest 
net  profit  can  be  obtained  by  selling  or  by  feeding 
these  crops. 

The  live  stock  industry  comes  into  competition 
to  some  extent  with  the  production  of  field  crops. 

79 


AGRICULTURAL    ECONOMICS 

The  farmer  who  feeds  and  properly  looks  after 
hogs,  cattle,  or  sheep,  cannot  spend  as  much  time 
in  the  field  as  he  who  keeps  no  stock  of  these 
kinds.  The  dairy  industry  comes  more  into  com- 
petition with  the  crops  of  the  fields,  than  do  the 
other  live  stock  industries.  But  while  a  part  of 
the  time  devoted  to  live  stock  must  be  subtracted 
from  the  time  which  can  be  spent  in  the  field,  yet, 
for  the  most  part,  the  live  stock  industry  is  supple- 
mentary to  the  other  branches  of  agricultural  pro- 
duction. Live  stock  requires  the  especial  atten- 
tion of  the  farmer  in  the  winter  when  nothing  can 
be  done  in  the  fields.  In  the  summer,  when  the 
farmer  is  busy  in  the  field,  much  of  the  live  stock 
is  shifting  for  itself  in  the  pasture,  and  there  is 
usually  enough  time  when  the  ground  is  too  wet 
for  work  in  the  field,  to  permit  the  farmer  to  give 
the  needed  attention  to  the  live  stock  which  is  in 
the  pasture. 

To  the  extent  that  the  live  stock  industry  is 
supplementary,  in  its  demands  upon  the  time  and 
energy  of  the  farmer,  to  the  production  of  farm 
crops,  he  has  only  to  decide  whether  the  additions 
to  his  total  net  profit,  resulting  from  the  trans- 
formation of  the  various  crops  into  animal  prod- 
ucts, are  sufficient  to  remunerate  him  for  the 
efforts  put  forth.  But  to  the  extent  that  the  live 
stock  industry  encroaches  upon  the  time  and 
energy  available  for  crop  production,  the  problem 
of  determining  whether  to  sell  his  crops  or  con- 
So 


ORGANIZATION    OF    THE    FARM 

vert  them  into  animal  products  presents  itself 
in  practically  the  same  form  as  that  of  selecting 
crops  for  the  field-system.  The  general  principle 
is  simple, — seek  the  largest  long-time-average  net 
profit, — but  the  practical  application  of  this  prin- 
ciple is  especially  difficult,  because  of  the  limited 
extent  to  which  these  two  lines  of  work  come  into 
conflict  with  each  other.  It  can  be  said,  how- 
ever, that  the  live  stock  industry  should  enable  the 
farmer  to  win  -as  large  a  net  profit  as  he  could  se- 
cure from  other  sources,  and  enough  more  to  make 
worth  while  the  extra  effort  put  forth  when  he 
could  have  found  employment  in  no  other  line  of 
productive  activity,  but  which  time  might  have 
been  spent  in  enjoying  the  products  of  his  labor 
or  in  improving  his  mind. 

The  problem  of  deciding  upon  the  kinds  of  live 
stock  to  be  kept  should  be  solved  by  the  principle 
which  has  already  been  discussed  under  the  head 
of  crop  competition.  It  is  perhaps  true  that  per- 
sonal likes  and  dislikes  enter  more  largely  into  the 
situation  here  than  in  the  selection  of  crops,  but 
having  taken  this  element  into  account,  the  vari- 
ous branches  of  live  stock  production  may  be 
classified  according  to  whether  they  are  more  or 
less  competitive  with  or  supplementary  to  each 
other  and  with  the  field  crops,  in  their  demands 
upon  the  time  and  energy  of  the  farmer,  and  then 
the  selection  should  be  made  on  the  basis  of  the 
6  81 


AGRICULTURAL    ECONOMICS 

largest  possible  addition  to  the  farmer's  total  net 
profit. 

One  factor  ever  to  be  kept  in  mind  in  counting 
the  profits  of  the  live  stock  industry  is  the  value, 
as  fertilizer,  of  the  manure,  which  is  a  very  im- 
portant by-product  of  this  industry.  This  ele- 
ment is  usually  underestimated  in  a  new  country, 
but  in  the  older  countries  where  commercial  fer- 
tilizers have  long  been  necessary  if  the  farmer 
would  secure  the  largest  net  profit  in  the  produc- 
tion of  field  crops,  full  value  must  be  given  to  this 
by-product. 

Professor  Charles  F.  Curtiss,  of  the  Iowa  Agri- 
cultural College,  says:1  "Maintenance  of  fer- 
tility is  secured  by  rotation  of  crops,  by  chemical 
fertilizers,  and  by  physical  and  bacteriological 
methods ;  but .  by  none  of  these  has  the  virgin 
strength  of  the  soil  been  maintained  over  long 
periods  except  as  plant  production  has  been  asso- 
ciated with  animal  husbandry.  By  selling  dairy 
products  in  the  form  of  butter  and  cheese  and 
restoring  the  by-products  by  feeding  the  skim 
milk,  buttermilk  and  whey  we  take  from  the  soil 
but  one-tenth  of  fertility  lost  by  a  grain  crop.  .  .  . 
If  fertilizing  material  must  be  bought  for  the 
farm,  it  can,  under  all  ordinary  conditions,  be 
bought  in  vastly  cheaper  form  as  feed  stuffs  and 
utilized  as  such,  and  the  residue  applied  to  the 

1From  a  paper  entitled,  "Economic  Functions  of  Live 
Stock,"  read  before  the  Economic  Section  of  the  A.  A.  A.  S., 
St.  Louis,  December,  1903. 

82 


ORGANIZATION    OF    THE    FARM 

soil,  than  by  purchasing  fertilizers  outright. 
The  very  best  of  fertilizers  are  often  obtained  in 
this  way  without  any  direct  outlay.  The  use  of 
feed  stuffs,  rich  in  fertility,  may  even  return  a 
handsome  profit  as  a  separate  proposition,  and 
thus  fertilizing  constituents  come  on  to  the  farm 
under  most  advantageous  circumstances.  The 
British  and  other  European  farmers  buy  large 
quantities  of  our  flaxseed  and  corn  by-products. 
They  figure  that  they  are  the  gainers  even  if  they 
do  not  make  any  profit  on  their  feeding  operations 
with  these  products,  and  they  are.  Until  re- 
cently the  packing-house  by-products,  including 
dried  blood  and  tankage  in  various  forms,  have 
practically  all  gone  direct  to  the  land  as  fertilizers. 
To-day  these  products  are  serving  a  most  impor- 
tant purpose  as  feed  stuffs,  and  the  time  is  near 
at  hand  when  practically  every  pound  .of  this  ma- 
terial will  first  be  utilized  as  stock  food,  and  later 
returned  to  the  soil.  The  returns  are  so  much 
greater  and  so  much  more  economical  in  this  way 
as  to  put  the  purely  commercial-fertilizer  farmer 
out  of  business  in  the  space  of  a  few  years  at  the 
outside,  where  other  conditions  are  similar." 

The  feeding  of  grain,  hay,  and  fodder  to  live 
stock  is  an  effective  means  of  converting  these 
crops  into  products  of  higher  specific  value,  which 
will  better  stand  the  costs  of  transportation  to  dis- 
tant markets.  "Cattle  and  hogs  not  only  convert, 
but  also  condense  Indian  corn.  They  enable  it 

83 


AGRICULTURAL    ECONOMICS 

to  be  profitably  raised  in  regions  too  far  removed 
from  the  markets  of  the  country  to  be  transported 
in  that  form.  By  condensing  the  Indian  corn 
to  one-fifth  or  one-sixth  of  its  bulk  and  weight, 
and  reducing  the  cost  of  transportation  in  some- 
thing like  a  similar  proportion,  the  possibility  is 
secured  of  raising  Indian  corn  in  regions  situated 
thousands  of  miles  from  the  market  at  which 
the  corn  products  or,  what  is  practically  the  same, 
the  pork  and  beef  are  consumed."1 

Maize  is  produced  primarily  for  the  feed  lot. 
Only  18.7  per  cent,  of  the  maize  crop  of  the 
United  States,  for  1903,  was  shipped  out  of  the 
county  where  it  was  grown.2  Twenty-eight  and 
six-tenths  per  cent,  of  the  oat  crop3  and  57.9  per 
cent,  of  the  wheat  crop4  was  shipped  out  of  the 
county  where  grown.  But  the  proportion  of  the 
maize  crop  which  is  fed  varies  greatly  in  the  difr 
ferent  parts  of  the  country.  The  farmers  of  Illi- 
nois produced  264,087,431  bushels  of  maize,  in 
1903,  52.8  per  cent,  of  which  was  shipped  out  of 
the  county  where  it  was  grown,  and  41  per  cent, 
of  which  was  yet  in  the  hands  of  the  farmers  on 
March  i,  1904;  whereas  the  Iowa  farmers  pro- 
duced 229,218,220  bushels  of  maize  in  the  same 
year  and  only  6  per  cent,  of  their  crop  was  shipped 

1  Monthly  Summary  of  Commerce  and  Finance,  February, 
1900,  p.  2279. 

a  Yearbook  of  the  Department  of  Agriculture,  1903,  p.  588. 
*  Ibid.,  p.  607. 
•Ibid.,  p.  598. 

84 


ORGANIZATION    OF    THE    FARM 

out  of  the  county  where  grown,  and  they  had  but 
30  per  cent,  of  the  crop  on  hand  March  i,  I9O4.1 

That  the  Iowa  farmers  feed  their  maize  more 
generally  than  do  the  Illinois  farmers  is  indicated 
by  the  fact  that  the  principal  source  of  income  on 
40.5  per  cent,  of  the  farms  of  Illinois  was  hay  and 
grain,  and  on  43  per  cent,  it  was  live  stock; 
whereas  in  Iowa  the  principal  source  of  income 
was  hay  and  grain  on  but  32  per  cent,  of  the 
farms,  and  live  stock  was  the  principal  source  of 
income  on  58." 5  per  cent,  of  the  farms.2  There 
were  3,710,020  hogs  in  the  state  of  Illinois  on 
January  i,  1904,  while  there  were  7,364,268  in 
Iowa.3  On  the  same  date  there  were  2,689,193 
cattle  in  Illinois  and  4,865,626  in  Iowa.4  These 
facts  point  definitely  to  a  great  difference  in  the 
farm  organization  in  these  two  states. 

There  are,  doubtless,  several  reasons  for  this 
difference  in  the  farm  economy  of  these  two 
states,  but  distance  from  the  markets  is  certainly 
a  very  important  factor.  The  distilleries  of  Illi- 
nois make  a  demand  for  materials  valued  at 
$3,734,652^  and  by  far  the  most  important  of 
these  materials  is  maize,6  while  no  maize  was  used 
for  this  purpose  in  Iowa.  The  glucose  factories 
of  Illinois  used  materials  valued  at  $12,988,845. 

1  Yearbook  of  the  Department  of  Agriculture,  1903,  p.  588. 

2  Twelfth  Census,  Vol.  V,  Table  18. 

8  Yearbook,  U.  S.  Department  of  Agriculture,  1903,  p.  673. 

4  Ibid.,  p.  663. 

6  Twelfth  Census,  Vol.  IX,  p.  614. 

6  Ibid.,  p.  615. 

85 


AGRICULTURAL    ECONOMICS 

which  was,  doubtless,  practically  all  maize ;  where- 
as, the  material  used  for  this  purpose  in  Iowa  was 
valued  at  $2,784,388.1  There  was  more  starch 
made  from  maize  in  Iowa  than  in  Illinois,  it  is  true, 
but  the  total  value  of  the  materials  used  for  this 
purpose  in  Iowa  was  only  $623,8 14.2  On  the 
whole,  therefore,  it  is  clear  that  the  local  manu- 
facturing industries  make  a  much  greater  demand 
for  maize  in  Illinois  than  in  Iowa. 

Chicago  is  so  located  as  to  be  the  principal 
market  for  maize  shipped  from  both  states  and 
the  Illinois  farmers  have  the  advantage  over  the 
Iowa  farmers  in  lower  freight  rates  to  this  mar- 
ket. Chicago  is  the  largest  "primary  market"  for 
maize  in  the  country.  During  the  fifty-two 
weeks  ending  January  2,  1904,  the  receipts  of 
maize  at  Chicago  were  91,560,168  bushels,  and 
the  shipments  from  this  market  were  87,523,525 
bushels.3  So  far  as  the  writer  has  been  able  to 
ascertain,  the  freight  rate  per  one  hundred  pounds 
of  hogs  in  car-load  lots  from  the  various  Iowa 
and  Illinois  railway  stations  to  Chicago,  is  about 
twice  that  for  maize  in  car-load  lots  from  the 
same  stations.  It  appears,  also,  that  the  rates 
for  these  commodities  are,  on  the  average,  about 
twice  as  high  from  the  Iowa  as  from  the  Illinois 
stations.  On  the  assumption  that  the  feeding  of 

1  Twelfth  Census,  Vol.  VIII,  p.  163 ;  Vol.  VII,  pp.  8  and  234. 

2  Ibid.,  Vol.  IX,  p.  576. 

8  Monthly  Summary  of  Commerce  and  Finance,  December, 
1903,  p.  2035. 

86 


ORGANIZATION    OF    THE    FARM 

the  maize  to  hogs  and  cattle  condenses  the  prod- 
uct to  one-sixth  its  original  weight,  there  would 
be  a  considerable  saving  in  freight,  by  such  con1- 
densation  of  the  product,  in  Illinois  as  well  as  in 
Iowa,  but  the  saving  would  be  twice  as  great  for 
the  Iowa  farmers  as  for  the  Illinois  farmers,  and 
as  the  price  of  maize  rises,  the  point  where  it 
would  be  more  profitable  to  ship  the  maize  than  to 
convert  it  into  live  stock  products  would  be 
reached  in  Illinois  before  it  would  be  reached  in 
Iowa. 

LITERATURE 

Adam  Dickson,  The  Husbandry  of  the  Ancients. 

Albrecht    Thaer,    Grundsaetze    der   rationellen    Landwirt- 

schaft. 

A.  Hunter,  Georgical  Essays. 

R.  Prothero,  Pioneers  and  Progress  of  English  Farming. 
J.   S.   Mill,  Principles  of  Political  Economy,  Volume  II, 

Book  III,  Chapter  XVII. 
Twelfth  Census  of  the  United  States,  1900,  Vol.  V. 


CHAPTER  VI 
THE   ORGANIZATION   OF   THE   FARM,   CONTINUED. 

THE  PROPORTIONS  IN  WHICH  THE  FACTORS  OF  PRODUCTION 
SHOULD  BE  BROUGHT  TOGETHER,  WITH  ESPECIAL  REFER- 
ENCE TO  INTENSITY  OF  CULTURE. 

Agriculture  is  said  to  be  extensive  or  intensive 
according  to  the  amount  of  labor,  capital-goods, 
and  managerial  activity  devoted  to  each  acre  of 
land.  When  a  small  amount  of  labor,  capital- 
goods,  and  managerial  activity  is  employed  on 
each  acre  of  land  the  culture  is  said  to  be  ex- 
tensive, when  a  large  amount,  it  is  said  to  be 
intensive.  There  is  variation  also  in  the  amount 
of  labor  which  is  associated  with  a  given  amount 
of  capital-goods.  In  the  United  States  we  use 
relatively  large  amounts  of  capital-goods  com- 
pared with  the  amounts  of  labor  employed,  while 
the  reverse  is  true  in  China.  There  may  be 
wide  variations,  also,  in  the  amount  of  managerial 
activity  associated  with  a  given  amount  of  labor 
and  capital-goods.  At  a  given  time  and  place 
some  definite  proportion  of  each  of  these  factors 
should  be  associated  if  the  best  results  are  to  be 
attained. 


ORGANIZATION    OF    THE    FARM 

Not  forgetting  that  "the  largest  total  net  profit" 
is  the  ideal  which  we  have  ever  before  us,  when 
considering  this  subject  from  the  standpoint  of 
the  farmer,  let  us  assume  that  the  farmer  has  at 
his  command,  land,  laborers,  and  capital-goods 
already  brought  together  in  the  most  desirable 
proportions.  Then,  leaving  until  later  the  dis- 
cussion of  the  rules  which  should  be  followed  in 
determining  these  proportions,  we  shall  first  at- 
tempt to  ascertain  the  number  of  composite  units, 
made  up  in  the  proper  proportions  of  the  other 
factors,  which  should  be  brought  under  a  given 
amount  of  managerial  activity. 

Assuming  that  a  farmer  wishes  to  devote  a 
given  amount  of  effort  to  the  management  of 
agricultural  operations,  the  question  arises 
whether  he  should  give  this  effort  to  a  large  num- 
ber of  these  composite  units  and  give  but  little 
attention  to  each  unit,  or  devote  this  same  amount 
of  managerial  activity  to  a  small  number,  and 
give  very  close  attention  to  each  unit.  If  the 
number  of  these  composite  units  under  one  man- 
agement be  increased,  without  any  increase  in  the 
amount  of  effort  put  forth  on  the  part  of  the 
manager,  so  that  less  and  less  attention  is  given 
to  each  unit,  a  gradual  decrease  in  the  return  per 
unit  will  take  place  as  the  number  of  units  is  in- 
creased, until  finally  a  point  will  be  reached  where 
all  of  the  net  profit  secured  by  adding  another  unit 
will  be  absorbed  by  the  subtractions  from  the 

89 


AGRICULTURAL    ECONOMICS 

returns  to  the  units  already  employed.  In  other 
words,  each  succeeding  composite  unit  brought 
under  a  given  amount  .of  managerial  activity  will 
add  less  and  less  to  the  total  product  until  finally 
the  point  will  be  reached  where  the  net  addition 
to  the  total  product  due  to  an  additional  com- 
posite unit  will  no  more  than  pay  the  costs  of 
engaging  the  cooperation  of  such  unit,  and  at  this 
point  the  additions  should  cease  if  the  farmer 
would  attain  to  the  ideal,  that  is,  if  he  would  se- 
cure the  largest  net  profit  for  a  given  amount  of 
exertion. 

This  point  may  be  illustrated  by  means  of  the 
following  table,  in  which  the  number  of  com- 
posite units  (a  unit  may  be  thought  of  in  this 
illustration  as  one  laborer  and  the  amount  of 
capital-goods  and  land  which  should  be  associated 
with  him)  to  be  associated  with  one  unit  of  man- 
agerial activity  (which  may  be  thought  of  as  the 
amount  of  such  activity  which  one  farmer  wishes 
to  devote  to  agricultural  production)  is  increased 
from  one  to  ten,  and  as  a  result  of  the  increase 
in  the  number  of  the  composite  units  brought 
under  the  one  management  the  net  profit  per  corrt- 
posite  unit  is  represented  as  gradually  falling 
from  $260  to  $40,  while  the  resulting  net  profit 
per  unit  of  managerial  activity  is  represented  as 
increasing  until  after  the  fifth  composite  unit  is 
added,  after  which  it  is  represented  as  falling. 


90 


ORGANIZATION    OF    THE    FARM 

Number  of  Composite 

Units  Associated  with      Net  Profit  per  Com-      Net  Profit  per  Unit  of 

a  Unit  of  Managerial  posite  Unit  Managerial  Activity 

Activity 

1  $260  $260 

2  240  480 

3  220  660 

4  190  760 

5  160  800 

6  130  780 

7  ioo  700 

8  80  640 

9  60  540 
10             40           400 

The  figures  here  used  are  selected  more  or  less 
arbitrarily,  it  is  true,  but  we  believe  they  illustrate 
quite  clearly  the  general  truth  that,  as  the  num- 
ber of  the  composite  units  brought  under  one 
management  is  increased,  the  average  return  per 
composite  unit,  and  hence  the  average  net  profit 
per  composite  unit  will  fall,  but  that  for  a  time 
this  fall  in  the  net  profit  per  composite  unit  is 
more  than  balanced  by  the  increase  in  the  number 
of  such  units,  and  the  net  profit  per  unit  of  man- 
agerial activity  continues  to  increase  until  finally 
the  point  is  reached  where  the  net  profit  per  unit 
of  managerial  activity  reaches  its  maximum,  and 
if  the  number  of  composite  units  associated  with 
a  given  amount  of.  managerial  activity  be  in- 
creased beyond  this  point  the  net  profit  per  unit  of 
the  latter,  and  hence  the  total  net  profit  which  the 
farmer  will  be  able  to  secure  as  a  manager,  will 
be  reduced  below  the  possible  maximum. 

When  a  great  deal  of  managerial  activity  is 
91 


AGRICULTURAL    ECONOMICS 

devoted  to  a  small  number  of  the  composite  units 
of  the  other  factors,  the  management  may  be  said 
to  be  intensive,  and  when  a  small  amount  the 
management  may  be  said  to  be  extensive.  The 
proper  degree  of  intensity  of  management  is  that 
which  yields  the  largest  net  profit  per  unit  of 
managerial  activity,  and  this  point  will  be  reached 
when  the  addition  of  another  composite  unit 
would  add  to  the  total  product  no  more  than 
enough  to  pay  the  costs  of  enlisting  its  coopera- 
tion. This  principle  applies  to  the  different  fac- 
tors severally  as  well  as  collectively.  The  amount 
of  land  brought  under  one  management  may  be 
increased  to  advantage  until  the  last  increment 
results  in  a  net  addition  to  the  total  product  no 
greater  than  the  rent  which  must  be  paid  to  secure 
the  use  of  the  land.  The  same  proposition  holds 
for  the  other  factors.  But  the  problem  still  re- 
mains as  to  the  proportions  which  will  exist  be- 
tween the  three  factors,  land,  capital-goods,  and 
hired  laborers,  when  the  amount  of  each  of  these 
brought  under  one  management  is  determined  by 
this  rule.  These  proportions  and  especially  the 
amount  of  labor  and  capital-goods  to  be  used 
upon  a  given  area  of  land  may,  with  profit,  be 
considered  in  considerable  detail. 

Let  us  first  consider  the  proportions  which 
should  exist  between  laborers  and  capital-goods 
in  this  composite  unit,  and  then  try  to  ascertain 
the  proportions  which  should  exist  between  land 

92 


ORGANIZATION    OF    THE    FARM 

and   this    smaller    composite   unit    made   up    of 
laborers  and  capital-goods. 

In  the  case  of  a  farmer  who  hires  no  laborers, 
but  performs  all  the  labor  himself,  the  first  of 
these  problems  merges  itself  into  the  one  we  have 
just  discussed,  and  the  simple  statement  will  suf- 
fice that :  additions  to  the  supply  of  capital-goods 
are  justifiable  so  long  as  such  increments  result 
in  a  net  addition  to  the  total  product,  greater  than 
the  cost  of  securing  their  cooperation  in  produc- 
tion. But  where  the  farmer  devotes  his  time  pri- 
marily to  the  management  of  the  farm  and  hires 
large  numbers  of  laborers,  the  proportions  in 
which  these  two  factors  should  be  brought  to- 
gether is  not  a  simple  problem. 

There  is  no  fixed  ratio,  which  holds  good  for 
all  times  and  all  places,  between  the  number  of 
laborers  and  the  amount  of  capital-goods  which 
should  be  employed  in  the  production  of  any  par- 
ticular crop,  and  of  course  the  proportion  will 
vary  with  the  crops  which  are  being  produced. 
Nearly  everything  that  is  now  done  by  machinery 
has  one  time  been  done  by  hand,  and  much  that  is 
now  done  by  hand  may  some  day  be  done  by  ma- 
chinery. At  a  given  time  and  place,  however, 
there  should  exist  a  certain  ratio  between  the 
number  of  laborers  and  the  amount  of  capital1- 
goods  brought  together  in  any  particular  line  of 
production,  in  order  that  the  farmer  may  win  the 
largest  net  profit  for  his  efforts. 

93 


AGRICULTURAL    ECONOMICS 

It  often  happens  that  a  fixed  number  of  laborers 
must  be  combined  with  certain  capital-goods ;  for 
•example,  one  man  is  required  for  each  harvesting 
machine;  but  in  many  cases  it  may  be  a  matter 
of  indifference,  aside  from  the  element  of  profit, 
whether  the  work  be  done  by  hand  or  by  horse 
power  and  machinery.  In  the  production  of 
wheat,  for  example,  the  proportion  of  capital- 
goods  might  be  reduced  and  the  same  produce 
obtained  by  increasing  the  number  of  laborers. 
The  reverse  of  this  proposition  is  also  true.  But 
while  these  variations  may  be  made  arbitrarily 
they  have  an  influence  upon  the  amount  of  the 
farmer's  share  of  the  product.  Of  all  the  vari- 
ous operations  necessary  to  produce  and  market 
a  bushel  of  wheat,  some  can  be  performed  more 
cheaply  by  the  use  of  horses  and  machines,  others 
by  means  of  laborers. 

Where  the  farmer's  aim  is  to  have  the  net 
profit  which  is  left  after  paying  the  hired  laborers 
and  paying  for  the  use  of  the  capital-goods,  as 
large  as  possible,  every  operation  should  be  per- 
formed by  laborers,  if  this  method  will  lower  the 
costs  of  production,  increase  the  product,  or  in 
any  other  way  increase  the  net  profits ;  and  every- 
thing should  be  done  by  means  of  horses  and  ma- 
chines or  other  forms  of  capital-goods,  which  can 
be  done  to  better  advantage  in  that  way.  It 
may  often  happen  that  the  cost  of  performing  cer- 
tain farm  operations  can  be  reduced  by  the  use 

94 


ORGANIZATION    OF    THE    FARM 

of  horses  and  machinery  in  the  place  of  laborers, 
but  it  may  at  the  same  time  happen  that  the  prod- 
uct resulting  from  these  operations  is  likewise 
reduced.  It  is  not  always  true,  therefore,  that 
every  operation  should  be  performed  in  the  least 
expensive  manner,  in  fact,  it  may  easily  happen 
that  the  most  expensive  method  will  result  in  the 
largest  net  profit. 

One  point  never  to  be  overlooked  in  consider- 
ing the  desirability  of  substituting  laborers  for 
capital-goods  or  vice  versa,  is,  the  relative  demand 
which  will  be  made  upon  the  time  and  energy  of 
the  manager.  Any  change  in  the  proportions  of 
these  factors  in  the  composite  unit,  which  will 
increase  the  amount  of  managerial  activity  per 
such  unit,  must  sufficiently  increase  the  farmer's 
net  profit  per  composite  unit  to  balance  the  loss 
due  to  the  reduction  in  the  number  of  such  units 
which  can  be  brought  under  a  given  unit  of  man- 
agerial activity. 

Where  the  substitution  of  the  one  factor  for 
the  other  makes  no  change  either  in  the  quantity 
of  the  product  or  in  the  amount  of  managerial 
activity  required,  the  rule  is  a  simple  one :  where 
there  is  a  choice  between  using  laborers  or  capital- 
goods  in  the  performance  of  certain  operations, 
choose  the  cheaper  method.  And  yet,  the  quali- 
fying phrases  in  this  formula  are  so  important 
that  the  problem  is  far  from  being  a  simple  one, 
and  in  many  cases,  perhaps  in  most  cases,  it  is  the 

95 


AGRICULTURAL    ECONOMICS 

more  fundamental  principle  of  seeking  the  largest 
net  profit  per  unit  of  managerial  activity,  which 
must  be  kept  uppermost  in  mind. 

A  change  in  the  rate  of  wages  without  a  cor- 
responding change  in  the  rate  of  return  to  capital, 
or  vice  versa,  will  necessitate  a  readjustment  of 
the  relative  amounts  invested  in  the  employment 
of  laborers  and  in  the  employment  of  capital- 
goods.  As  wages  rise  relatively  to  the  returns  to 
capital-goods,  there  should  be  less  labor  and  more 
capital-goods  employed.  Improvement  in  ma- 
chinery often  make  it  profitable  to  substitute 
capital-goods  for  laborers.  The  self-binder,  the 
hay-loader,  and  the  windmill  are  examples  where 
this  has  been  true. 

Having  decided  upon  the  proportions  in  which 
laborers  and  capital-goods  should  be  associated, 
the  farmer  is  still  confronted  with  the  problem  of 
determining  how  many  composite  units,  made  up 
of  laborers  and  capital-goods  in  the  proper  pro- 
portions, should  be  employed  upon  a  given  area 
of  land  in  the  production  of  a  given  crop.  This 
is  the  problem  of  determining  the  proper  intensity 
of  culture.  There  is  always  some  degree  of  in- 
tensity which  will  yield  the  largest  net  profit ;  but 
what  is  that  degree  of  intensity? 

For  the  sake  of  simplicity,  let  us  first  suppose 
that  the  farmer  can  get  as  much  land  of  a  given 
grade  as  he  may  want  to  use,  without  paying  any- 
thing for  its  use.  Under  such  circumstances, 

96 


ORGANIZATION    OF    THE    FARM 

how  many  composite  units,  composed  of  laborers 
and  capital-goods  should  be  associated  with  an 
acre  of  land?  For  the  purposes  of  this  illustra- 
tion let  us  assume  a  small  composite  unit,  the  use 
of  which  costs  the  farmer  one  dollar.  It  is  obvi- 
ous that  in  the  production  of  maize,  for  example, 
the  application  of  one  of  these  units,  per  acre  of 
land,  would  ordinarily  produce  very  little,  if  any 
maize  at  all.  It  is  possible  that  the  expenditure 
of  two  units  would  produce  a  small  crop ;  but  then 
the  third  unit  would  increase  the  product  more 
than  the  second,  the  fourth  more  than  the  third, 
and  so  on  until  a  point  of  stationary  returns  has 
been  reached,  after  which  the  succeeding  units 
may  be  said  to  continue  for  a  time  to  add  less  and 
less  to  the  total  product,  until  a  point  may  be 
reached  where  further  applications  would  add 
nothing  to  the  total  product.  Thus  in  agricultural 
production  the  returns  to  succeeding  composite 
units  made  up  of  laborers  and  capital-goods,  may 
be  said  to  follow  the  law  of  increasing  returns 
until  a  point  of  stationary  returns  has  been  reached, 
after  which  the  law  of  diminishing  returns  per 
succeeding  unit  commences  to  operate. 

This  may  be  illustrated  by  means  of  a  diagram. 
In  Fig.  i  the  composite  units  of  labor  and  capital- 
goods  applied  to  a  given  acre  of  land  are  measured 
on  the  line  A  B,  commencing  at  A.  The  line  A  I' 
B  represents  the  increasing  and  diminishing  re- 
turns per  succeeding  unit.  Having  in  mind  land 
7  97 


AGRICULTURAL    ECONOMICS 


with  a  given  degree  of  productivity,  the  distance 
between  the  lines  A  B  and  A  I'  B  will  depend 
upon  the  degree  of  qualitative  efficiency  possessed 
by  the  farmer  who  operates  the  laborers  and  the 
capital-goods,  and  also  upon  the  character  of  the 
laborers  and  capital-goods  which  he  employs. 
For  this  reason  it  will  be  necessary  to  keep  in 
mind  a  given  farmer  employing  a  given  grade  of 
laborers  and  capital-goods,  as  well  as  a  given 
piece  of  land.  With  these  conditions  in  mind  we 
may  speak  of  the  area  AC  C  (Fig.  i)  as  repre- 
senting the  product  which  would  result  if  but  one 
unit  were  employed  per  acre,  and  of  the  area  C  C' 
Dr  D  as  representing  the  increase  in  the  product 
due  to  the  addition  of  the  second  unit  and  so  on  for 
the  succeeding  units.  As  illustrated  in  Fig.  i,  the 


w 


F     R    H 


X   YL 


Fig.  i. 


product  of  each  succeeding  unit  is  greater  than 
the  one  preceding  it  until  six  units  have  been  ex- 
pended, after  which  each  succeeding  unit  may  be 
said  to  yield  a  smaller  product  than  the  one  im- 
mediately preceding  it. 

Indeed  it  may  be  true  that  a  law  of  stationary 
98 


ORGANIZATION    QF    THE    FARM 

returns  per  succeeding  unit  operates  during  the 
application  of  a  few  units,  after  the  final  point  of 
increasing  return  has  been  reached  and  before  the 
starting  point  of  diminishing  returns  per  succeed- 
ing unit  has  been  reached.  It  may  be  true  also, 
that  the  line  A  I'  in  Fig.  i,  should  rise  rapidly 
with  the  application  of  one  particular  unit,  say 
the  fourth,  and  then  remain  stationary  or  even 
fall  with  the  application  of  the  fifth,  and  then  rise 
very  rapidly  again  with  the  application  of  the 
sixth.  The  introduction  of  drainage  or  the  use 
of  commercial  fertilizers  might  bring  such  a 
result.  There  are  at  present  no  data  from  which 
to  calculate  the  exact  curve  which  the  returns  per 
succeeding  unit  will  follow,  but  the  general  rise 
followed  by  a  general  fall  is  a  matter  of  common 
observation. 

With  this  illustration  (Fig.  i)  before  us,  sup- 
pose the  farmer  has  one  thousand  of  these  com- 
posite units,  made  up  of  laborers  and  capital- 
goods,  to  expend  in  agricultural  production.  In 
other  words,  suppose  that  this  farmer  has  found 
that  he  can  secure  the  largest  net  profit  when  he 
operates  just  one  thousand  of  these  units  of  labor 
and  capital-goods.  With  free  land  at  his  dis- 
posal, how  many  acres  will  he  use  and  how  many 
units  will  he  employ  upon  each  acre?  Will  he 
apply  five  units  per  acre  and  use  two  hundred 
acres  of  land?  No,  his  expenditures  will  pro- 
duce a  greater  total  product  when  he  employs  six 

99 


AGRICULTURAL    ECONOMICS 

units  per  acre  and  confines  himself  to  one  hun- 
dred and  sixty-six  and  two-thirds  acres.  But 
will  this  make  the  labor  and  capital-goods  most 
productive?  On  first  thought  one  might  answer 
yes,  because  the  seventh  unit  adds  less  to  the 
product  than  the  sixth;  but  upon  looking  more 
closely  into  the  matter,  it  is  apparent  that  there 
is  no  good  reason  for  ceasing  to  apply  more  units 
simply  because  the  point  of  diminishing  returns 
per  succeeding  unit  has  been  reached.  The  sev- 
enth unit  may  add  less  to  the  total  product  than 
the  sixth,  and  yet  add  more  than  any  of  the  first 
four  units,  and  the  average  product  per  unit  may 
be  greater  when  seven  units  have  been  applied 
than  when  only  six  have  been  expended.  Hence 
the  total  product  of  the  thousand  units  may  be 
greater  when  seven  units  have  been  applied  to 
each  acre  and  only  one  hundred  and  forty-three 
acres  of  land  employed.  But  at  what  point 
should  the  farmer  cease  to  increase  his  applica- 
tions per  acre  of  land?  It  is  obvious  that  there 
is  a  limit,  that,  for  example,  a  thousand  units  ex- 
pended upon  one  acre  of  land  in  the  production 
of  Indian  corn  would  yield  a  smaller  return  per 
unit  than  when  more  land  is  used  and  the  number 
of  units  applied  to  each  acre  more  limited.  But 
what  is  the  limit?  It  is  true  that  in  the  case 
before  us  the  sixth  unit  increases  the  total  product 
more  than  any  unit  before  or  after  it,  but  all  units 
cannot  be  sixth  units.  The  first,  the  second,  and 

100 


ORGANIZATION    OF    THE    FARM 

the  third  are  indispensable ;  and,  in  case  a  farmer 
can  manage  a  fixed  number  of  these  composite 
units,  made  up  of  capital-goods  and  laborers, 
when  employed  in  the  production  of  a  given  crop 
without  reference  to  the  area  on  which  they  are 
employed,  the  highest  average  return  per  unit  is 
the  thing  which  he  should  seek,  for  with  a  fixed 
cost  per  composite  unit  this  will  enable  him  to 
secure  the  largest  net  profit  per  composite  unit, 
consistent  with  the  proper  intensity  of  manage- 
ment, and  hence  will  enable  him  to  secure  the 
maximum  total  net  profit  for  his  exertion. 

In  the  illustration  (Fig.  i)  the  average  product 
per  unit  is  represented  as  increasing  rapidly  until 
the  sixth  unit  has  been  applied  and  then  less  rap- 
idly until  a  point  is  reached  where  the  return  per 
increment  is  just  equal  to  the  average.  At  this 
point  the  average  return  per  unit  reaches  the 
maximum,  and  the  application  of  another  incre- 
ment would  reduce  the  average  product  per  unit 
employed.  The  thousand  composite  units  are 
used  in  the  most  economical  manner  when  the 
acreage  is  so  limited  that  the  number  of  units  ap- 
plied to  each  acre  is  just  sufficient  to  yield  the 
maximum  average  return  per  unit.  For  exam- 
ple, the  highest  average  return  would  be  gained 
by  the  application  of  X  units  in  the  case  before 
us  in  Fig.  i,  where  the  location  of  X  is  deter- 
mined by  the  fact  that  the  rectangle  A  V  X'  X  is 
drawn  in  such  a  manner  that  its  area  equals  the 

TOT 


AGRICULTURAL    ECONOMICS 

area  A  T  X'  X,  which  represents  the  total  product 
of  X  composite  units  of  the  two  factors,  laborers 
and  capital-goods.  That  part  of  the  rectangle 
lying  between  the  line  H  H'  and  line  1 1',  for  ex- 
ample, represents  the  average  return  per  unit. 
Had  the  applications  stopped  at  I,  after  the  appli- 
cation of  but  six  units,  the  total  product  would  be 
represented  by  the  area  A  I'  I,  or  the  rectangle 
A  W  N  I,  and  the  average  return  per  unit  would 
have  been  less.  Likewise  had  the  applications 
been  increased  to  nine  units,  the  average  return 
per  unit  would  have  fallen.  Hence  a  curve  of 
increasing  and  diminishing  average  returns  may 
be  drawn,  based  upon  the  increasing  and  dimin- 
ishing returns  of  the  successive  composite  units 
of  labor  and  capital-goods.  This  curve  of  aver- 
ages is  represented  by  line  AX' P  (Fig.  i)  which 
is  so  drawn  that  it  will  pass  through  the  upper 
right  hand  corner  of  any  rectangle  which  has 
AC,  A  D,  A  E,  etc.,  or  any  part  thereof,  as  a  base 
and  which  encloses  an  area  equal  to  the  area  A  C 
C,  AD'  D,  A  E'  E,  etc.,  respectively,  as  rect- 
angles A  W  N I  and  A  V  X'  X  have  been  drawn 
in  Fig.  I. 

As  illustrated  in  Fig.  i,  the  curve  of  averages 
reaches  the  highest  point  at  X'  and  the  highest 
average  product  per  unit  is  gained  by  employing 
seven  and  two-fifths  units  per  acre,  and  it  will 
be  seen  at  once  that,  since  all  the  charges  which 
must  be  deducted  are  a  fixed  amount  per  com- 

IO2 


ORGANIZATION    OF    THE    FARM 

posite  unit  of  labor  and  capital-goods  applied,  the 
higher  the  average  return  per  unit,  the  greater 
will  be  the  farmer's  net  profit  per  composite  unit, 
and  under  the  assumption  that,  in  the  production 
of  a  given  crop,  the  same  amount  of  managerial 
activity  is  required  per  composite  unit  without 
regard  to  the  area  of  the  land  on  which  it  is  em- 
ployed, and  when  there  is  no  rent  to  pay,  the 
applications  should  increase  until  the  point  of 
maximum  average  returns  per  unit  is  reached. 
This  is  the  most  extensive  agriculture  that  is  con- 
sistent with  the  greatest  net  profit  to  the  farmer 
under  any  circumstances;  in  the  production  of  a 
given  crop,  and,  under  the  above  assumption  as 
to  demands  upon  managerial  activity,  it  is  the 
most  intensive  that  is  in  accordance  with  the 
farmer's  highest  economic  interest,  where  the 
use  of  land  may  be  had  free. 

It  has  been  said1  that  the  intensity  of  culture 
should  be  increased  until  the  final  increment  adds 
no  more  to  the  total  product  than  enough  to  cover 
the  cost  of  that  unit.  If,  in  Fig.  i,  for  example, 
the  value  of  the  product  represented  by  a  rect- 
angle whose  sides  are  K  L  and  L  L'  equals  the 
cost  of  securing  the  use  of  a  composite  unit,  the 
applications  should,  according  to  this  view,  be 
increased  just  to  point  L.  It  is  true  that  this 
would  enable  the  farmer  to  secure  the  largest  net 
profit  per  acre  of  land,  but  unless  he  be  a  marginal 

1  T.  N.  Carver,  The  Distribution  of  Wealth,  p.  80. 
103 


AGRICULTURAL    ECONOMICS 

farmer,  in  which  case  the  two  statements  coin- 
cide, it  would  reduce  his  net  profit  per  com- 
posite unit  of  the  other  factors.  If  the  farmer 
were  able  to  operate  a  given  number  of  acres  of 
land  without  regard  to  the  degree  of  intensity  of 
culture,  then  it  would  be  desirable  to  secure  the 
largest  net  profit  per  acre;  but  if  he  can,  to  advan- 
tage, manage  only  a  given  number  of  units  of 
labor  and  capital-goods  regardless  of  the  area  on 
which  it  is  expended,  then  he  should  seek  the  larg- 
est net  profit  per  unit  of  these  factors. 

It  may  be  well  at  this  point  to  devote  a  few 
lines  to  the  assumption,  that,  within  the  limits 
of  the  variations  in  intensity  of  culture  which 
is  likely  to  exist  in  the  production  of  a  given  crop, 
the  same  amount  of  managerial  activity  is  re- 
quired per  composite  unit  composed  of  the  two 
factors,  laborers  and  capital-goods,  without  re- 
gard to  the  area  of  the  land  on  which  it  is 
employed. 

In  general,  we  believe  this  assumption  to  be 
very  near  the  truth.  In  the  production  of  Indian 
corn,  for  example,  the  amount  of  managerial 
activity  required  for  each  laborer  with  the  team 
and  tools  which  are  used  by  him  would  be  the 
same  whether  thirty  acres  of  the  crop  were  culti- 
vated three  times,  or  the  same  laborer  and  capital- 
goods  were  used  in  cultivating  twenty-two  and 
one-half  acres  of  maize  four  times.  Certainly  if 
one  must  choose  between  this  assumption,  and  the 

104 


ORGANIZATION    OF    THE    FARM 

assumption  that  the  same  amount  of  managerial 
activity  is  required  for  each  acre  of  land,  regard- 
less of  the  intensity  of  culture,  there  is  little  ques- 
tion as  to  the  choice.  It  is  doubtless  true  that  one 
man  can  superintend  the  operations  of  more  labor- 
ers and  capital-goods  when  they  are  brought  to- 
gether under  one  roof  as  in  a  large  manufacturing 
plant  than  when  they  are  distributed  over  a  vast 
area  of  land,  but  on  the  farm  and  in  the  produc- 
tion of  a  given  crop  we  believe  that,  as  a  rule,  the 
demands  upon  the  time  and  energy  of  the  man- 
ager, per  composite  unit  of  the  two  factors,  labor- 
ers and  capital-goods,  will  remain  practically  the 
same  regardless  of  the  area  on  which  such  unit 
is  expended.  We  shall  proceed,  therefore,  upon 
this  assumption  in  our  attempt  to  ascertain  the 
degree  of  intensity  of  culture  which  is  most  eco- 
nomical where  land  has  acquired  some  value  so 
that  something  must  be  paid  for  its  use. 

When  a  fixed  sum  per  acre  must  be  paid  for  its 
use,  land  should  be  cultivated  more  intensively 
than  when  it  could  be  had  free.  Suppose,  for  ex- 
ample, that  three  dollars  per  acre  must  be  paid 
for  the  use  of  land.  We  may  think  of  this  rent 
as  taking  all  of  the  product  of  the  first  four  and 
one-half,  or  R  composite  units  of  the  factors  ap- 
plied (Fig.  i).  In  this  discussion  we  shall  speak 
of  that  share  of  the  product  which  is  left  after 
paying  the  rent,  as  a  net  return.  The  farmer  may 
be  said  to  receive  no  net  return  from  his  expendi- 

105 


AGRICULTURAL    ECONOMICS 

tures  until  the  rent  is  paid.  Should  he  cease  his 
applications  when  R  units  have  been  employed, 
the  product  would  just  pay  the  rent  and  he  would 
lose  the  cost  of  the  labor  and  capital-goods,  be- 
sides receiving  nothing  for  his  trouble.  What- 
ever he  produces  by  further  applications  is  the 
fund  which  gives  rise  to  the  net  profits  after  the 
wages  of  hired  laborers  and  the  payment  for  the 
use  of  capital-goods  have  been  withdrawn. 

When  there  is  no  rent  to  pay,  the  farmer  seeks 
the  highest  average  gross  return  per  unit  of  ex- 
penditure; but,  where  a  fixed  rent  must  be  paid, 
he  no  longer  seeks  the  highest  average  gross  re- 
turn, but  the  highest  average  net  return  per  unit, 
for,  under  the  assumption  that,  in  the  production 
of  a  given  crop,  the  amount  of  managerial  activity 
per  composite  unit  of  laborers  and  capital-goods 
remains  the  same  regardless  of  the  area  on  which 
it  is  expended,  the  largest  net  return  per  composite 
unit  of  these  factors  will  enable  the  farmer  to 
secure  the  largest  net  profit  per  unit  of  managerial 
activity  put  forth,  and  this  is  the  goal  in  agricul- 
tural production  when  viewed  from  the  stand- 
point of  the  farmer. 

The  average  net  return  per  unit  follows  the  law 
of  increasing  and  diminishing  returns  in  the  same 
manner  as  the  average  gross  return;  but,  when  a 
fixed  rent  is  paid,  the  line  of  increasing  average 
net  return  starts  at  point  R  (Fig.  i) ;  for  all  of 
the  product  up  to  point  R  is  required  to  pay  the 
106 


ORGANIZATION    OF    THE    FARM 

rent,  and  the  average  net  return  at  that  point  is 
zero.  After  the  application  of  five  units  the  aver- 
age net  return  per  unit  will  be  represented  by  one- 
fifth  of  the  area  R  R'  H'  H;  for  the  total  return 
minus  the  rent  is  represented  by  the  area  R  R' 
H'  H,  and  since  five  units  have  been  applied  this 
net  return  must  be  divided  by  five  to  find  the 
average.  Likewise  after  the  application  of  the 
sixth  unit,  it  will  be  one-sixth  of  the  area  R  R' 
I'  I.  After  the  application  of  the  seventh  unit, 
the  average  will  be  one-seventh  of  the  area  R  R' 
Kf  K.  Thus  the  line  of  average  net  returns  (line 
R  Y'  P'  in  Fig.  i )  rises  rapidly  until  the  line  /  /' 
is  crossed,  after  which  it  rises  less  rapidly  until  it 
crosses  the  line  /'  B,  after  which  it  falls.  When 
a  fixed  rent  is  paid,  the  line  of  average  net  returns 
can  never  rise  so  high  as  the  line  of  average  gross 
returns,  and  the  point  Y' ,  where  the  line  of  aver- 
age net  returns  reaches  its  maximum  distance 
from  the  base  line  A  B,  will  always  be  farther 
to  the  right  than  point  X' ;  and  hence  the  high- 
est average  net  return  per  composite  unit  of 
labor  and  capital-goods  employed  on  land  for 
which  a  fixed  rent  must  be  paid,  will  be  gained 
by  a  more  intensive  culture  than  when  the  same 
land  could  be  had  rent  free. 

When  the  farmer  follows  the  rule  of  seeking 
the  largest  net  profit  for  his  exertion,  the  degree 
of  intensity  of  culture  on  a  given  piece  of  land 
and  in  the  production  of  a  given  crop  will  vary 

107 


AGRICULTURAL    ECONOMICS 

with  the  amount  of  the  fixed  rent  which  is  paid 
for  its  use, — the  greater  the  amount  of  rent,  the 
higher  the  degree  of  intensity,  for  when  a  higher 
rent  must  be  paid  for  the  use  of  the  land  a  more 
intensive  culture  is  necessary  if  the  highest  aver- 
age net  return  is  to  be  secured. 

If  the  proposition  is  reversed  and  we  think  of 
successive  increments  of  land  being  brought 
under  a  given  number  of  composite  units  of  the 
other  factors,  the  simple  statement  will  suffice 
that  the  amount  of  land  should  be  increased  until 
the  final  increment  of  land  adds  just  enough  to 
the  total  product  to  pay  the  cost  of  securing  the 
use  of  the  land.1  It  will  readily  be  seen  that  this 
would  result  in  the  degree  of  intensity  of  culture 
which  will  yield  the  largest  net  return  per  com- 
posite unit  of  the  other  factors.  On  the  assump- 
tion, therefore,  that  one  farmer  can  manage  a 
given  number  of  the  composite  units  of  labor  and 
capital-goods  without  regard  to  the  area  on 
which  it  is  expended,  the  same  conclusion  will  be 
arrived  at  with  regard  to  the  proper  degree  of 
intensity  of  culture  where  land  can  be  had  free  or 
where  a  fixed  rent  must  be  paid  for  its  use, 
whether  one  adds  successive  units  of  the  other 
factors  to  a  given  area  of  land  until  the  average 
net  return  per  unit  reaches  the  maximum,  or 
whether  one  adds  successive  acres  of  land  to  a 

1See   The  Distribution   of   Wealth,  by   T.    N.    Carver,   pp. 
80-83. 

108 


ORGANIZATION    OF    THE    FARM 

given  number  of  the  composite  units  of  the  other 
factors  until  the  final  increment  of  land  adds  just 
enough  to  the  total  product  to  pay  the  fixed  rent 
which  must  be  paid  to  secure  the  use  of  said  incre- 
ment of  land. 

The  conditions  are  practically  the  same  if  the 
farmer  owns  the  land  which  he  cultivates  as  if  he 
pays  a  fixed  rent,  the  only  difference  being  that 
he  has  paid  for  the  perpetual  use  of  the  land, 
whereas  the  tenant  pays  annually  for  its  use. 

The  payment  of  a  share  rent  does  not  tend  to 
increase  the  intensity  of  culture.  The  share  rent 
increases  as  the  total  product  increases;  and  it 
may  be  thought  of  as  taking  some  fixed  portion, 
say  one-third,  of  the  product  of  each  succeeding 
unit  of  labor  and  capital-goods  applied,  so  that 
the  farmer  gets  only  two-thirds  of  the  product 
of  each  unit,  and  his  share  reaches  the  highest 
average  return  per  unit  with  the  same  degree  of 
intensity  which  yields  the  highest  average  gross 
return  per  unit.  Hence,  where  the  share  tenants 
follow  their  own  self-interest,  they  will  farm  no 
more  intensively  on  the  best  land  when  less  pro- 
ductive grades  of  land  have  been  resorted  to  than 
when  only  the  best  grade  was  cultivated. 

To  illustrate  this  point,  draw  a  curved  line 
from  A  to  B  in  Fig.  2,  at  such  a  distance  from 
lines  A  I'  B  and  A  B  as  to  leave  two-thirds  of  the 
area  of  each  section  between  the  lines  A  B  and 
A  I  B.  Then  draw  a  line  through  the  points  of 
109 


k. :  x  :  :  v  1 7  v  5  A  i   z  :  ;  .<•  ;_>:::£ 


v.e 
was 


v    .   ---.: 


TtepcintZ 

::--  /-I    :.;  .V  -; 


ation 


wiH  a 


ctthmt?  Sofpoie  tint  wage*  and  interest 
enty  per  cent;  w>0  it  then  pay  the  former 
*t  more  unit*  per  acre?  If  the  rent  should 

the  same  as  before  the  reduction  in  wages 
terest,  and  if  the  foregoing  reasoning  with 

10  the  proper  nitensitf  of  cotore  be  true, 
gree  of  intensity  in  terms  of  ojujiitjlies  of 
and  capital-goods  which  would  yield  the 
t  net  return  would  not  change;  but  the  ex- 

110 


ORGANIZATION    OF    THE    FARM 

penditure  per  acre  in  value  would  be  decreased 
and  the  profits  of  the  farmer  would  be  increased 
in  the  same  proportion.  This  higher  profit  might 
increase  the  demand  for  land,  however,  and  this 
would  likely  result  in  a  rise  in  rents,  after  which 
it  would  pay  to  increase  the  quantity  of  labor  and 
capital-goods  employed,  excepting  in  the  case  of 
the  share  tenant. 

The  intluence  of  a  rise  or  fall  in  the  price  for 
which  the  product  can  be  sold,  will  influence  the 
degree  of  intensity  only  as  it  may  affect  the 
amount  of  rent  which  must  be  paid  for  the  use 
of  land.  As  prices  rise  the  rent  tends  to  rise  and 
the  degree  of  intensity  should  be  increased,  while 
the  reverse  is  true  in  the  case  of  falling  prices. 
This  is  true  because  land  of  a  given  degree  of 
productivity  is  limited,  and  as  labor  and  capital- 
goods  increase  in  quantity,  land  of  a  less  pro- 
ductive grade  must  be  resorted  to,  and  without 
improvements  this  is  possible  only  when  wages 
and  interest  fall  or  prices  rise.  But  there  is  a 
close  relation  betueen  the  gross  return  which  the 
marginal  land  \\  ill  yield  and  the  amount  of  wages 
and  interest  which  labor  and  capital-goods  can 
command  on  other  grades  of  land.  This  means 
of  course  that  as  the  less  productive  lands  are 
morted  to  the  rent  which  the  competitors  will 
for  the  better  land  will  rise,  and  then  the 
largest  net  retmu  and  hence  the  largest  net  profit 

til 


AGRICULTURAL    ECONOMICS 

per  composite  unit  of  labor  and  capital-goods,  can 
be  gotten  only  by  more  intensive  culture. 

In  this  connection  the  influence  of  lower  wages 
and  lower  interest  and  higher  rents,  upon  the 
choice  of  crops,  should  be  reviewed,  because  it 
often  happens  that  a  rise  in  rents  will  result  in 
the  change  from  a  crop  wrhich  requires  but  little 
expenditure  for  labor  and  capital-goods  per  acre 
to  one  that  requires  large  expenditures  per  acre. 

That  degree  of  intensity  of  culture  which 
brings  the  largest  net  profit  to  the  landowning 
farmer  or  to  the  tenant  who  has  a  fixed  rent  to 
pay,  seems  also  to  be  that  degree  of  intensity 
which  makes  the  total  amount  of  land,  labor, 
capital-goods,  and  managerial  activity  employed 
in  the  agricultural  industry,  most  productive.  It 
appears,  therefore,  that  at  this  point  there  is  a 
harmony  of  interests  between  the  individual  and 
society  as  a  whole;  but  it  would  seem  that  the 
interest  of  the  share  tenant  is  not  in  harmony 
with  the  interest  of  society  as  a  whole  in  this 
regard,  for  if  the  better  grades  of  land  are  farmed 
so  extensively  as  the  interest  of  the  share  tenant 
seems  to  dictate,  poorer  grades  of  land  would  need 
to  be  used  in  order  that  the  labor  and  capital- 
goods  of  the  country  be  employed,  and  some  of 
this  labor  and  capital-goods  on  the  marginal  land 
would  be  creating  a  smaller  product  than  it  could 
be  made  to  yield  if  employed  in  farming  the  better 
grades  of  land  to  a  more  intensive  degree;  and, 

112 


ORGANIZATION    OF    THE    FARM 

therefore,  while  a  given  share  tenant  could  in- 
crease his  net  profit  by  this  extensive  culture,  such 
culture  would  reduce  the  total  value  of  the  agri1- 
cultural  productions  of  the  country  as  a  whole. 

The  interest  of  the  share  tenant  is  also  out  of 
harmony  with  that  of  the  landlord  in  this  regard. 
Since  it  is  to  the  interest  of  the  landlord  that  the 
share  which  accrues  to  him  as  rent  shall  be  as 
large  as  possible,  he  may  desire  that  the  intensity 
of  culture  be  carried  to  the  farthest  extreme.  So 
long  as  an  increment  of  expenditure  will  add  any- 
thing to  the  product  it  might  seem  to  his  interest 
to  have  the  increment  applied,  for  it  would  add 
to  his  income.  Thus,  stated  in  its  extreme  form, 
it  would  seem  that  while  the  share  tenant  would 
desire  to  farm  so  extensively  that  the  average 
gross  return  per  unit  of  labor  and  capital  would 
reach  the  maximum,  the  landlord  might  desire 
that  the  gross  return  per  acre  should  reach  its 
absolute  maximum,  without  regard  to  cost  per 
unit  of  the  product. 

It  is  evident  that  the  interest  of  the  landlord 
as  well  as  that  of  the  share  tenant  is  here  in  con- 
flict with  the  interest  of  society  as  a  whole;  for 
to  follow  what  seems  to  be  the  landlord's  high- 
est economic  interest  in  this  particular,  would 
result  in  the  reduction  of  the  total  agricultural 
product  which  could  be  produced  with  a  given 
amount  of  social  energy. 

But  it  becomes  apparent  that  the  landlord  will 
8  "3 


AGRICULTURAL    ECONOMICS 

always  be  unable  to  induce  his  share  tenant  to 
farm  any  more  intensively  than  an  owner  of  land 
or  a  tenant  with  a  fixed  rent  finds  it  to  his  interest 
to  farm  his  land,  for  the  tenant  could  otherwise 
do  better  by  paying  a  cash  rent  or  by  taking  up 
new  land  of  nominal  value.  On  the  other  hand, 
the  share  tenants  are,  in  the  United  States,  quite 
generally  under  the  direct  supervision  of  the 
owners  of  the  land,  who  insist  that  the  share 
tenant  should  farm  as  well  as  the  owner  would 
do.  It  may  be  true  that  this  ideal  is  not  often 
perfectly  attained,  and  yet  the  tendency  is  for  the 
landlord  to  so  bring  his  influence  to  bear  upon 
the  share  tenant  that  the  social  loss  due  to  share 
tenancy  is,  perhaps,  not  very  great.  Yet  this 
conflict  between  the  interest  of  the  landlord  and 
that  of  his  share  tenant  is  a  factor  which  becomes 
more  and  more  difficult  to  adjust  as  land  values 
rise. 

LITERATURE 

T.  N.  Carver,  The  Distribution  of  Wealth,  Chapter  II. 
Wilhelm  Roscher,  Nationalokonomik  des  Ackerbaues,  Book 
II,  Chapters  II  and  III. 

PROBLEMS  IN  AGRICULTURAL  ARITHMETIC 

BASED    UPON    AND    INTENDED    TO    ILLUSTRATE    THE    FOREGOING 
PRINCIPLES 

Suppose  that  a  farmer  who  employs  labor  and  capital- 
goods  of  a  given  grade  in  the  production  of  maize  should 
find  by  experimentation,  that,  with  wages,  wear  and  tear, 
interest    and    other    elements    which   must   be   taken   into 
114 


ORGANIZATION    OF    THE    FARM 

account  in  figuring  the  cost  of  using  capital-goods,  as  they 
were  at  a  given  time,  the  following  varying  expenditures 
would  yield  the  corresponding  varying  results. 


Dollars  per  Acre 

Bushels  per  Acre 
in  Field  A 

Bushels  per  Acre 
in  Field  B 

I 

O 

0 

2 

0 

2 

3 

0 

6 

4 

0 

15 

5 

10. 

28 

6 

25 

37 

7 

38 

42 

8 

48 

46 

8.2 

49.1 

46.6 

8-4 

50.2 

47-1 

8.6 

Si.3 

47-5 

8.8 

52.3 

47-8 

9.0 

53-2 

48.0 

9.2 

54-1 

48.2 

94 

54-9 

48.4 

9-6 

557 

48.6 

9.8 

56.5 

48.8 

IO.O 

57.0 

49.0 

II.O 

60.0 

49-5 

12.0 

62.0 

49.8 

13-0 

63.0 

50.0 

I4.O 

63.5 

50.1 

15 

63.5 

50.1 

PROBLEMS 

(1)  Supposing  that  the  farmer  could  get  all  the  land 
he  cared  to  use,  rent  free,  either  of  the  quality  found  in 
Field  A  or  Field  B ;  which  kind  of  land  would  it  pay  him 
the  better  to  use  ? 

(2)  When  maize  is  worth  25  cents  per  bushel  and  a 
rent  of  $2.50  per  acre  is  charged  for  the  land  of  either  grade, 
which  grade  would  prove  the  more  profitable  to  the  farmer, 
and  to  what  degree  of  intensity  should  he  cultivate  it? 

(3)  In  case  the  farmer  must  give  one-third  of  the  crop 


AGRICULTURAL    ECONOMICS 

to  the  landlord,  as  rent,  to  what  degree  of  intensity  would 
he  farm  each  of  the  fields,  A  and  B,  if  he  followed  his  own 
highest  economic  interest?  To  what  degree  of  intensity  if 
he  followed  the  highest  economic  interest  of  the  landlord? 
Explain  fully  how  society  as  a  whole  would  lose  in  either 
case. 

(4)  When  maize  is  worth  35  cents  per  bushel  and  the 
rent  which  must  be  paid  for  the  use  of  the  land  in  Field  A 
is  $5.00  per  acre,  what  is  the  highest  rent  which  the  farmer 
could  afford  to  pay  for  the  use  of  the  land  in  Field  B  ? 

(5)  How  would  a  rise  of  20  per  cent,  in  the  cost  of 
labor  and  capital-goods  affect  the  above  problems? 

(6)  How  would  the  second  problem  (2)  be  affected  if 
the  price  of  corn  should  rise  to  40  cents  per  bushel  and  the 
rent  should  at  the  same  time  rise  to  $4.00? 

(7)  How  would  problem  three   (3)  be  affected  if  the 
landlord  should  agree  to  take  twelve  and  one-half  bushels 
of  maize  per  acre  instead  of  one-third  of  the  crop? 

(8)  Suppose  that  the  rent  of  the  land  is  $2.50  per  acre 
and  that  with  this  rent  the  highest  average  net  return  per 
dollar's  worth  of  labor  and  capital-goods  is  gained  in  the 
production  of  maize  when  $8  is  expended  per  acre,  and  in 
beets  when  $32  is  expended,  and  that  the  maize  crop   is 
worth  $15  per  acre,  and  the  beets  are  worth  $48  per  acre, 
and  further  that  the  farmer  can  manage  four  times  as  many 
acres  of  maize  as  of  beets  and  that  the  two  crops  are  equally 
beneficial  to  the  soil;  which  of  the  two  crops  would  prove 
the  more  profitable  to  the  farmer? 

(9)  Suppose  that  the  rent  rises  to  $5  per  acre,  the  ex- 
penditure on  maize  to  $9  and  that  on  beets  to  $36,  and  that 
the  maize  crop  is  then  worth  $16.25  per  acre,  and  the  beet 
crop  $53  per  acre ;  which  would  then  prove  the  more  profit- 
able crop  to  the  farmer? 

(10)  How  would  the  9th  problem  have  been  affected 
if  the  price  of  maize  had  risen  ten  per  cent,  without  any 
corresponding  change  in  the  price  of  the  beets? 


116 


CHAPTER  VII 
THE    SIZE    OF    FARMS.    THE    ECONOMIC    PRINCIPLES 

WHICH    DETERMINE    THE    SIZE    OF    FARMS  J    THE    SIZE    OF 
FARMS   IN  VARIOUS  COUNTRIES. 

Section  I.  The  economic  principles  which  de- 
termine the  size  of  farms. — The  amount  of  land 
which  a  farmer  should  attempt  to  operate,  in 
order  that  he  may  win  the  largest  total  net  profit, 
depends  upon  many  varying  conditions :  the  kinds 
of  crops  which  he  grows ;  the  intensity  of  culture ; 
the  character  of  the  horses,  the  tools,  and  the 
machines  which  he  uses ;  the  number  and  charac- 
ter of  the  laborers  which  he  employs;  and  the 
efficiency  of  the  farmer  himself,  are  all  impor- 
tant factors  in  determining  the  size  of  the  farm 
which  is  most  economical. 

Where  tobacco  or  sugar  beets  are  cultivated, 
one  man  cannot  operate  so  large  a  farm  as  where 
maize  is  the  principal  crop.  In  the  tobacco  dis- 
tricts of  Dane  County,  Wisconsin,  farms  have  de- 
creased in  size  in  recent  years ;  while  in  the  dairy 
districts  they  are  larger  now  than  fifteen  years  ago. 
In  New  England,  where  mixed  or  grain  farming 
has  been  unprofitable  for  the  last  twenty-five  years, 
some  regions  have,  in  recent  years,  been  devoted 

117 


AGRICULTURAL    ECONOMICS 

to  dairying,  and  others  to  fruit  growing.  Where 
fruit-growing  has  replaced  the  old  agriculture 
farms  are  smaller  than  formerly.  Where  dairy- 
ing has  been  generally  introduced  the  average 
farm  is  larger  than  before  the  change. 

Since  intensive  culture  requires  more  labor 
upon  a  given  area  of  land,  it  is  impossible  for  one 
man  to  cultivate  so  many  acres  where  the  culture 
is  intensive  as  where  it  is  extensive.  In  new 
countries,  where  land  is  relatively  abundant,  ex- 
tensive culture  is  generally  most  profitable  and  the 
average  size  of  farms  is  usually  greater  than  in 
older  countries  where  land  is  scarce,  land  values 
very  high,  and  intensive  culture  most  profitable. 

A  farmer  can  use  more  land  when  he  has  the 
most  efficient  forms  of  capital-goods  with  which 
to  work.  The  fact  that  five  times  as  many  men 
are  often  employed  upon  a  given  area  of  land  in 
England  as  upon  the  same  area  in  the  United 
States  is  not  explained  wholly  by  the  difference  in 
the  degree  of  intensity  of  culture  in  the  two  coun- 
tries. The  American  farmers  have,  as  is  well 
known,  much  more  and  better  labor-saving  ma- 
chinery than  do  the  English. 

The  efficiency  of  the  farmer  is  an  important 
factor  in  determining  how  much  land  he  can  use 
to  best  advantage.  The  energetic  man,  whose 
clear  head  and  strong  arms  enable  him  to  plan  his 
work  most  economically  and  to  do  it  quickly,  can 
operate  a  much  larger  farm  than  his  neighbor  who 

118 


THE    SIZE    OF    FARMS 

may  be  characterized  by  the  opposite  qualities. 
This  may  happen  as  a  result  of  variations  in  the 
quantitative  efficiency  even  where  the  farmers 
perform  most  all  of  the  work  themselves ;  but  the 
farmer  who  is  qualitatively  very  efficient  as  a 
manager  of  agricultural  operations,  can  increase 
his  total  net  profits  by  operating  a  large  farm  by 
means  of  hired  laborers  who  may  have  little  man- 
aging ability  themselves,  but  who  have  ordinary 
capacity  for  the  performance  of  farm  labor  when 
directed  by  an  efficient  farmer.  The  kinds  of 
crops,  the  intensity  of  culture,  the  efficiency  of 
the  capital-goods  and  of  the  farmer  himself  re- 
maining the  same,  the  greater  the  number  of  labor- 
ers, of  a  given  degree  of  efficiency,  who  are 
employed  by  one  farmer  the  larger  the  farm  may 
be  to  advantage.  A  question  may  arise  as  to  how 
far  this  increase  in  the  number  of  laborers,  and  the 
accompanying  increase  in  the  size  of  farms, 
should  be  carried  in  order  that  the  farmer  shall 
win  the  largest  net  return  for  his  efforts,  and 
also  as  to  the  desirability  of  large  farms  socially 
considered. 

If  a  farmer  possesses  superior  managing 
ability,  so  that  it  is  profitable  for  him  to  devote 
all  of  his  time  and  energy  to  the  management  of 
a  farm,  employing  laborers  to  perform  all  of  the 
detailed  operations,  how  large  a  farm  should  he 
attempt  to  operate?  The  farmer  should  look,  of 
course,  to  the  net  profit  which  is  left  after  the  pay- 
up 


AGRICULTURAL    ECONOMICS 

ment  for  the  use  of  the  land  and  capital-goods, 
and  the  payment  of  the  wages  of  hired  laborers 
have  been  made. 

Having  decided  upon  the  branch  of  agriculture 
which  he  is  to  follow,  the  grade  of  land,  capital- 
goods,  and  laborers  which  he  is  to  employ,  the 
kind  of  crops  which  should  be  grown,  and  the 
proportions  in  which  these  factors  should  be 
brought  together  and  the  amount  of  managerial 
activity  which  should  be  devoted  to  each  unit,  the 
farmer  has  yet  to  determine  how  many  of  these 
composite  units  he  should  attempt  to  manage. 

If  the  farmer  could  increase  the  number  of 
these  composite  units  indefinitely  without  any 
increase  in  the  work  of  management,  and,  at  the 
same  time,  without  any  reduction  in  the  quality  of 
the  management,  and  hence,  without  any  reduction 
in  the  average  net  return  per  composite  unit,  there 
would  be  no  limit  to  the  size  of  the  farm  nor  to 
the  total  net  profit  which  he  could  win.  This  is, 
of  course,  impossible.  The  supposition  is  made 
to  emphasize  the  fact  that  it  is  the  increased 
amount  of  effort  which  the  farmer  must  put 
forth,  and  the  tendency  towards  a  decline  in  the 
efficiency  of  his  management  after  the  farm  has 
reached  large  proportions,  which  set  the  limit  to 
the  size  of  the  farm. 

The  principle  which  should  be  followed  in  at- 
tempting to  determine  the  number  of  composite 

units  made  up  of  the  proper  proportions  of  land, 
1 20 


THE    SIZE    OF    FARMS 

labor,  and  capital-goods,  which  should  be  brought 
under  a  given  amount  of  managing  activity,  has 
already  been  considered  in  the  preceding  chapter 
and  we  shall  now  consider,  therefore,  the  condi- 
tions which  set  the  limit  to  the  quantity  of  man- 
agerial activity  which  a  farmer  will  expend  and 
which  ultimately  determines  the  size  of  the  farm. 
Having  decided  upon  the  number  of  the  com- 
posite units  of  the  factors  which  should  be 
brought  under  a  given  amount  of  managerial 
activity,  that  is  the  intensity  of  the  management, 
other  things  remaining  the  same,  the  size  of  the 
farm  should  vary  directly  as  the  amount  of  effort 
which  the  farmer  is  willing  to  put  forth  in  its 
management.  The  farmer's  energy  is,  of  course, 
limited,  and  after  he  has  performed  a  given 
amount  of  work  per  day,  it  requires  more  and 
more  inducement  to  impel  him  to  increase  his 
activity.  It  may  be  that  a  few  hours  of  work  each 
day  would  be  a  pleasure  to  him,  and  that  the 
profits  which  he  received  from  these  few  hours' 
labor  would  be  much  more  than  enough  to  induce 
him  to  perform  the  work  of  management;  but 
when  hour  after  hour  is  added  to  the  time  which 
he  must  spend  in  the  fields,  and  the  rapidity  of  his 
movements  from  place  to  place  must  be  increased 
more  and  more,  in  order  that  the  farm  may  be 
properly  operated,  each  succeeding  addition  to 
the  time  and  the  speed  of  his  work  becomes  more 
and  more  wearisome,  while  at  the  same  time  the 
121 


AGRICULTURAL    ECONOMICS 


wants  which  are  to  be  satisfied  by  the  fruits  of 
this  increased  labor  become  less  and  less  impor- 
tant to  him,  until  finally  the  point  is  reached 
where  the  increase  in  the  net  profit  is  not  sufficient 
to  induce  the  farmer  to  increase  his  activity. 


C'     D'     E'     F'     G'     H'      l'     K'     L' 


M><>    O' 


C      D 


F      G      H       I       K 

FIG.  3 


L      M     N      O 


This  can  be  illustrated  by  means  of  a  diagram. 
In  Fig.  3  the  succeeding  composite  units  of  the 
agents  are  measured  on  the  base  line  A  X,  and  the 
net  profit  which  the  farmer  receives  for  manag- 
ing these  units  is  represented  by  the  area  between 
this  line  and  the  line  B  Y,  so  that  the  area 
A  B  C'  C,  for  example,  represents  the  net  return 
from  one  of  the  composite  units.  If  the  idea  of 
a  composite  unit  seems  too  abstract  to  the  reader, 
he  may  think  of  one  of  these  units  of  the  agents 
of  production  as  one  laborer  and  the  amount  of 
land  and  capital-goods  associated  with  him. 
That  share  of  the  net  profit  per  unit  which  is  rep- 
resented by  the  area  lying  below  the  curved  line 
P  P'  may  be  thought  of  as  the  amount  which  is 
required  to  yield  to  the  manager  a  pleasure  in 
consumption  goods  equal  to  the  pain  of  per- 
forming the  work  of  management.  Assuming 


122 


THE    SIZE    OF    FARMS 

that  he  devotes  exactly  the  same  care  to  each  unit, 
as  he  continues  to  increase  the  number  of  units, 
the  perpendicular  distance  between  lines  A  X  and 
B  Y  will  remain  constant ;  but  a  larger  and  larger 
proportion  of  the  net  profits  of  the  succeeding 
units  will  be  required  to  counterbalance  the  pain 
or  dis-utility  accompanying  the  added  exertion, 
required  for  the  management  of  such  units,  hence 
the  curve  P  Pf  will  gradually  rise  until  at  some 
point  it  will  cross  the  line  B  Y,  at  which  point 
the  farmer  will  cease  to  increase  the  size  of  his 
farm. 

Which  is  the  most  desirable  from  the  social 
point  of  view,  the  large,  the  medium,  or  the  small 
farm  ?  Having  in  mind  that  farmers  vary 
greatly  in  their  degrees  of  efficiency,  it  would 
seem  socially  desirable  to  have  the  managing  done 
by  the  most  efficient  farmers ;  for  in  this  way  the 
labor  would  be  under  more  efficient  direction,  than 
where  every  man  directs  his  own  activities.  An- 
other advantage  of  large  farms  lies  in  the  fact  that 
they  facilitate  a  more  extended  division  of  labor. 
There  can  be  a  shepherd  who  devotes  all  of  his 
time  to  the  sheep,  and  for  this  reason  he  can  better 
understand  his  business.  So  it  is  in  every  line  of 
work  on  the  large  farm.  Machinery  can  be  used 
to  better  advantage  on  the  large  farm.  The  effi- 
cient manager  of  the  large  farm  can  better  deter- 
mine what  will  pay  and  what  will  not  pay,  so  that 
he  is  in  a  much  better  position  to  direct  the  labor 

123 


AGRICULTURAL    ECONOMICS 

power  of  society  to  the  best  advantage.  The  man 
who  is  toiling  in  the  field  as  well  as  managing 
the  farm  is  less  likely  to  be  far-sighted  at  a  time 
when  he  is  tired,  and  at  such  times  he  may  sacrifice 
much  of  the  profits  for  a  relatively  small  saving  of 
labor. 

On  the  other  hand  what  improves  the  efficiency 
of  the  management  in  this  way  may  lower  the 
quality  of  the  workmanship.  There  are  some 
men,  it  is  true,  who  seem  to  work  better  for  others 
than  for  themselves,  but  with  many  others,  the 
opposite  is  true.  There  are  vast  numbers  of  small 
farmers  who  do  not  use  good  methods,  who,  be- 
cause of  their  interest  in  that  which  is  their  own, 
will  put  forth  greater  effort  than  they  would  if 
they  were  working  for  some  one  else. 

It  has  been  said  that  certain  kinds  of  farming 
lend  themselves  more  readily  than  others  to  large 
scale  operations;  that  wheat  farming,  for  exam- 
ple, is  especially  suited  to  large  scale  operations, 
but  that  as  this  one  crop  system  gives  way  to  di- 
versified farming,  the  advantages  of  smaller  farms 
assert  themselves.  The  owner  of  young  stock 
takes  more  pains  with  them  than  he  would  if  he 
were  a  hired  laborer.  It  is  certainly  true  as  a 
general  rule  that  the  man  who  owns  the  lambs  or 
pigs  will  lose  more  sleep  and  go  to  more  trouble 
than  will  a  hired  man.  "He  that  is  an  hireling, 
and  not  the  shepherd,  whose  own  the  sheep  are 
not,  seeth  the  wolf  coming,  and  leaveth  the  sheep, 

124 


THE    SIZE    OF    FARMS 

and  fleeth :  and  the  wolf  catcheth  them,  and  scat- 
tereth  the  sheep.  The  hireling  fleeth,  because  he 
is  an  hireling,  and  careth  not  for  the  sheep."1 

The  management  of  a  farm  is  something  which 
must  be  diffused  through  the  details  of  the. work. 
There  is  a  withdrawal  of  the  efficient  manager's 
ability  from  the  details  and  a  concentration  of  it 
upon  the  general  supervision  of  the  farm  as  the 
size  of  the  farm  increases.  As  more  and  more  of 
the  details  are  delegated  to  hired  men  these  details 
are  not  looked  after  so  well  as  they  might  be  if 
looked  after  directly  by  the  master.  Cato,  a 
Roman  agricultural  writer,  says,  "Neither  the 
assiduity  and  experience  of  the  hired  manager, 
nor  the  power  and  willingness  of  the  master  to 
lay  out  money  in  improvements,  are  so  effectual 
as  this  one  thing,  the  presence  of  the  master; 
which,  unless  it  is  frequent  with  the  operations,  it 
will  happen  to  him  as  in  an  army  when  the  general 
is  absent;  all  things  will  be  at  a  stand."2  And, 
again,  Pliny  says,  "The  ancients  were  in  the  habit 
of  saying,  that  it  is  the  eye  of  the  master  that  does 
more  towards  fertilizing  a  field  than  anything 
else."3 

The  question  of  the  most  desirable  size  of 
farms,  when  viewed  from  the  standpoint  of  the 

1  Gospel  of  St.  John,  Chapter  X,  verses  12  and  13. 

2  Adam  Dickson,  The  Husbandry  of  the  Ancients,  Vol.  I,  p. 
200. 

8  Natural  History,  Book  XVIII,  Chapter  8,  Bohn's  edition, 
Vol.  IV,  p.  17. 

125 


AGRICULTURAL    ECONOMICS 

most  economic  use  of  the  productive  energies  of  a 
country,  is  a  matter  of  determining  the  point 
at  which  the  advantages  of  the  more  efficient  gen- 
eral supervision  as  to  crops,  field-systems,  inten- 
sity of  culture,  etc.,  are  balanced  by  losses  in  the 
execution  of  the  details  of  the  work  with  less 
skill  and  personal  interest. 

The  conclusion  is,  therefore,  that  every  man 
who  can  make  more  by  hiring  to  a  farmer  should 
do  so,  and  every  farmer  who  can  increase  his  net 
profits  by  hiring  men  and  increasing  the  size  of 
his  farm,  without  increasing  the  amount  of  effort 
which  he  need  put  forth,  should  do  so.  Each 
man  would  then  get  the  largest  net  income,  and 
the  value  of  the  agricultural  productions  of  the 
country  would  reach  the  maximum. 

But  the  actions  of  men  are  not  controlled  en- 
tirely by  economic  motives.  There  is  a  pleasure 
to  be  derived  from  being  one's  own  master,  which 
is  often  prized  more  highly  than  many  of  the 
things  which  money  can  buy.  As  a  result  many 
men  remain  independent  farmers  when  they  could 
secure  a  larger  income  for  themselves  and  add 
more  to  the  value  of  the  agricultural  productions 
of  the  country  by  being  hired  men  under  the  direc- 
tion of  more  efficient  managers.  And  yet  it  may 
be  that  this  economic  loss  is  compensated  for  in 
the  social  gain  that  comes  from  self-directed 
activity. 

The  proper  size  of  farms  is  a  subject  which  has 
126 


THE    SIZE    OF    FARMS 

commanded  the  attention  of  agricultural  writers 
since  ancient  times.  "The  ancients,"  says  Pliny, 
"were  of  opinion,  that,  above  all  things,  the  extent 
of  farms  ought  to  be  kept  within  proper  bounds. 
Wherefore  it  was  a  maxim  amongst  them,  to  sow 
less  and  plow  better.  Such,  too,  I  find,  was  the 
opinion  entertained  by  Virgil,  and  indeed,  if  we 
must  confess  the  truth,  it  is  the  wide-spread  do- 
mains that  have  been  the  ruin  of  Italy,  and  soon 
will  be  that  of  the  provinces  as  well.  .  .  .  With  that 
greatness  of  mind  which  was  so  peculiarly  his 
own,  and  of  which  he  ought  not  to  lose  the  credit, 
Cneius  Pompeius  would  never  purchase  the  lands 
that  belonged  to  a  neighbor."1 

Columella,  another  Roman  agricultural  writer, 
also  taught  moderation  in  the  size  of  farms.  "To 
the  other  precepts,"  says  he,  "we  add  this,  which 
one  of  the  seven  wise  men  has  pronounced  as  a 
maxim,  that  holds  true  in  all  ages,  that  there  ought 
to  be  limits  and  measures  of  things;  and  this 
ought  to  be  understood,  as  applied  not  only  to 
those  that  do  any  other  business,  but  also  those 
that  buy  land,  that  they  may  not  buy  more  than 
they  are  fully  able  for.  To  this  is  applicable  the 
famous  sentence  of  our  poet,  You  may  admire  a 
large  farm,  but  cultivate  a  small  one;  which 
ancient  precept  this  most  learned  man  [Virgil], 

1  Natural  History,  Book  XVIII,  Chapter  7.  The  first  part 
of  this  quotation  is  taken  from  the  translation  as  given  by 
Adam  Dickson,  Husbandry  of  the  Ancients,  Vol.  I,  p.  193 ; 
the  latter  part  is  from  Bohn's  edition,  Vol.  IV,  pp.  14  and  15. 

127 


AGRICULTURAL    ECONOMICS 

....  expresses  in  numbers.  This,  too,  is  agree- 
able to  an  acknowledged  maxim  of  the  Carthagin- 
ians, a  very  acute  nation,  That  the  land  ought  to 
be  weaker  than  the  husbandman;  for,  when  they 
struggle  together,  should  the  farm  prevail,  the 
master  must  be  ruined.  And,  indeed,  there  is 
no  doubt,  that  a  small  field  well  cultivated  pro- 
duces more  than  a  large  field  ill  cultivated."1 
"Among  the  maxims  of  the  ancients,  recorded  by 
Palladius,"  says  Dickson,  "there  is  one  to  the 
same  purpose  with  that  mentioned  by  Columella, 
'A  small  farm  cultivated  is  more  fruitful  than  a 
large  farm  neglected/  "2 

Section  II.  The  size  of  farms  in  various  coun- 
tries. A.  The  size  of  farms  in  the  United  States. 
— The  total  number  of  farms  in  the  United  States 
in  1900  was  5,739,657.  The  total  area  of  these 
farms  was  841,201,546  acres.  The  average  area 
per  farm  was  146.6  acres,  and  the  average  number 
of  improved  acres  per  farm  was  72.3.  In  the  fol- 
lowing table  are  given  the  number  of  farms  of  the 
various  sizes,  the  percentage  of  the  area  of  farm 
land  in  each  class,  and  the  percentage  of  all  farms 
in  each  class. 

JAdam  Dickson,  Husbandry  of  the  Ancients,  Vol.  I,  pp.  195 
and  196. 

2  Husbandry  of  the  Ancients,  Vol.  I,  p.  198. 


128 


THE    SIZE    OF    FARMS 


TABLE 

i.    THE  FARMS  OF  THE  UNITED  STATES  CLASSIFIED 

ACCORDING  TO  SIZE. 

i 

Percent- 

Percent- 

age of 

age 

Number  of 

Improved 

of  All 

Classes  of  Farms 

Farms 

Area 

Farms 

Under 

tVirp*»  nrrp^ 

41,882 

.02 

jy 

3  acres  and  under  10  

226,564 

.30 

4.0 

10 

20.... 

407,012 

1.23 

7.1 

20 

"       "       "      50.... 

1,257,785 

7.96 

21.9 

50 

"         "          "       100  

1,366,167 

16.23 

23.8 

100 

"    "     "  175.... 

1,422,328 

28.54 

24.8 

175 

"     "     "   260.... 

490,104 

15.24 

8.5 

260 

"     "     "   500.... 

377,992 

17.44 

6.6 

500 

"         "          "    IOOO.... 

102,549 

7.11 

1.8 

IOOO 

"       "     over.  . 

47.276 

S.Q2 

.8 

Total  5,739,657  100.00  100.0 

From  Table  No.  i,  it  will  be  seen  that  a  very 
large  proportion  of  the  farms  of  the  United  States 
(70.5  per  cent.)  fall  into  the  three  classes  of  farms 
ranging  from  twenty  to  fifty,  fifty  to  one  hundred, 
and  from  one  hundred  to  one  hundred  and  sev- 
enty-five acres  respectively.  With  regard  to  the 
geographical  distribution  of  the  farms  of  the  vari- 
ous sizes  it  was  shown  by  the  census  returns  for 
1900  that  small  farms  ranging  from  twenty  to 
fifty  acres  were  most  abundant  in  the  southern 
states,  the  percentage  in  this  class  in  the  South 
Atlantic  division  being  27.6,  and  30.1  in  the 
South  Central  division,  as  compared  with  21.9 
for  the  country  as  a  whole.  Farms  ranging  from 
fifty  to  one  hundred  acres  in  extent  are  relatively 
most  abundant  in  the  North  Atlantic  division, 

1  Twelfth  Census,  Vol.  V,  Tables  i  and  5. 
9  129 


AGRICULTURAL    ECONOMICS 

where  the  percentage  belonging  to  this  class  is 
28.3,  as  compared  with  23.8  for  the  country  as  a 
whole.  Farms  containing  from  one  hundred  to 
one  hundred  and  seventy-five  acres  are  relatively 
most  abundant  in  the  North  Central  division, 
where  the  percentage  is  29.9  as  compared  with 
24.8  for  the  country  as  a  whole.  This  same  divi- 
sion contains,  also,  the  highest  proportion  of 
farms  ranging  from  one  hundred  and  seventy-five 
to  two  hundred  and  sixty  acres  in  size,  the  percen- 
tage being  n,  as  compared  with  8.5  for  the 
country  as  a  whole.  The  farms  containing  two 
hundred  and  sixty  acres  and  over  were  relatively 
most  abundant  in  the  Western  division,  the  per- 
centage there  being  23.6  as  compared  with  9.2 
for  the  United  States  as  a  whole. 

It  may  be  said  with  respect  to  the  kind  of  agri- 
culture which  prevailed  on  the  farms  of  the  vari- 
ous sizes  that  the  census  returns  for  1900  show 
that  on  the  farms  which  contained  one  hundred 
acres  or  more  the  principal  sources  of  income 
were,  in  the  vast  majority  of  cases,  hay,  grain, 
and  live  stock.  While  on  farms  ranging  from 
ten  to  fifty  acres  the  principal  source  of  income 
was  more  often  cotton  than  any  other  one  product. 
This  corresponds  with  the  fact  that  small  farms 
ranging  from  twenty  to  fifty  acres  in  extent  are 
most  abundant  in  the  southern  states.  It  corre- 
sponds also  with  the  fact  that  about  half  of  the 
farms  on  which  cotton  is  the  principal  product, 
130 


THE    SIZE    OF    FARMS 

are  operated  by  negroes  and  that  farms  operated 
by  negroes  are  usually  comparatively  small,  about 
nine-tenths  of  the  negro  farmers  having  been 
found  to  occupy  farms  of  less  than  fifty  acres  in 
extent. 

Small  farms  in  the  cotton  belt  have  not  always 
been  so  common,  as  is  shown  by  the  rapid  decline 
in  the  average  size  of  farms  in  the  southern  states 
since  1860.  In  the  South  Central  division  where 
the  decline  in  the  size  of  farms  has  been  most 
marked,  the  "average  number  of  acres  per  farm 
was  321.3  in  1860,  and  155.4  in  1900.  This  is 
the  result  of  replacing  the  plantation  system  with 
the  tenant  system  after  the  slaves  had  been  eman- 
cipated. The  questions  of  the  labor  supply  and 
the  size  of  farms  are  here  closely  associated.  It 
may  well  be  questioned  if  the  change  from  large 
to  small  farms  in  the  production  of  cotton  has 
been  of  any  economic  advantage  either  to  the 
farmers  or  to  the  country  as  a  whole. 

B.  The  size  of  farms  in  England.1 — There 
were  380,179  farms  ("agricultural  holdings")  in 
England  in  1895.  These  holdings,  or  farms,  con- 
tained in  the  aggregate,  24,844,688  acres  of  im- 
proved land,  that  is,  land  under  crops,  bare  fal- 
low, or  grass.  The  average  number  of  improved 
acres  per  farm  was,  therefore,  slightly  more  than 
sixty-five.  These  figures  include  all  of  the  hold- 

1  Board  of  Agriculture,  Returns  as  to  the  number  and  size 
of  agricultural  holdings  in  Great  Britain  in  the  year  1895, 
Parliamentary  Papers,  C. — 8243,  p.  3. 

131 


AGRICULTURAL    ECONOMICS 

ings  of  agricultural  land  above  one  acre  in  extent. 
The  following  table  shows  _the  number  of  farms 
of  the  various  sizes  and  the  percentage  of  the  total 
improved  area  of  farm  land  which  is  found  in 
each  class  of  farms. 

TABLE  2.    THE  FARMS  OF  ENGLAND  CLASSIFIED  ACCORDING 
TO   SlZE,   WITH   THE    PERCENTAGE   OF  THE   TOTAL 
IMPROVED  AREA  FOUND  IN  EACH  CLASS,  ACCORD- 
ING TO  THE  RETURNS  FOR  iSgs.1 

Percent- 
age of 
Improved 
Area 

1.07 
4.87 
8.36 
1370 
42.00 

16.86 

10.35 
2.79 


Classes  of  Farms 

Number  of 
Farms 

Above      i  acre  and  not  exceeding    5  .  . 

87,055 

5  acres  "     " 

20.. 

108,145 

"         20     "        "       " 

50.  . 

62,446 

«         50     "        "       " 

IOO.  . 

46,574 

«      I00     «        «       « 

300.  . 

60,381 

«      300     "        «       « 

500.  . 

11,112 

«    5oo    «      «     « 

"        1,000.  . 

3,942 

"  1,000     " 

Total    , 

542 

380,170 

100.00 

C.  The  size  of  farms  in  Germany.2 — The  total 
number  of  farms  in  Germany,  in  1895,  was  5,558,- 
317.  The  total  area  in  these  farms  was  106,913,- 
313  acres,  so  that  the  average  size  of  farms  was 
19.2  acres.  Under  the  term  Betrieb,  which  may 
be  translated  farm,  is  included  every  piece  of  land 
large  or  small  which  is  used  for  agricultural  pur- 
poses and  which  is  cultivated  or  managed  directly 

1  Board  of  Agriculture,  Returns  as  to  the  number  and  size 
of  agricultural  holdings  in  Great  Britain  in  the  year  1895, 
Parliamentary  Papers,  C. — 8243,  p.  3. 

a  Statistik  des  Deutschen  Reichs,  Neue  Folge,  Band  112, 
Erster  Abschnitt,  Die  landwirthschaftlichen  Betriebe. 

132 


THE    SIZE    OF    FARMS 

by  one  man.  When  all  farms  are  excluded  which 
are  less  than  one  hectare  or  2.47  acres,  the  average 
size  is  nearly  doubled,  being  34.37  acres.  Yet 
these  general  averages  would  be  considerably  re- 
duced if  the  waste  lands  were  counted  out,  as  only 
seventy-five  per  cent,  of  the  total  area  of  farms  is 
reckoned  as  cultivated  land,  that  is,  land  used  as 
cultivated  fields,  gardens,  meadows,  rich  pastures, 
orchards,  and  vineyards.  In  the  following  table 
is  given  the  number  of  farms  of  the  various  sizes, 
and  the  percentage  of  the  total  area  in  farms, 
which  is  found  in  each  class. 

TABLE  3.    THE  FARMS  OF  GERMANY  CLASSIFIED  ACCORDING 
TO  SIZE,  1895. 


Number  of        Percentage  of  total 

Classes  of  farms 

farms 

area  in  farms 

Less  than       2.47  acres 

2,529,132 

2.63 

2.47     to       12.35     " 

1,723,553 

12.52 

12.35               49.42 

998,804 

28.96 

49.42      "      123.55     " 

239,643 

21.86 

123.55             247.10 

42,124 

8.54 

247.10      "      494.20     " 

11,250 

5-43 

494.20      "    1235-50     " 

9,631 

9-75 

1235.50      "    2471.00     '* 

3,608 

7.63 

2471.00  acres  and  over 

572 

268 

Total 5,558,317  100.00 

Eastern  Germany  is  a  land  of  large  farms.  In 
the  southwestern  part  very  small  holdings  prevail, 
while  in  the  northwest  and  in  the  south  medium- 
sized  farms  are  most  common. 

D.     The  size  of  farms  in  France? — In  1892 

1  Flour  De  Saint-Genis,  Propriete  Rurale  en  France,  Chap- 
ter II. 

133 


AGRICULTURAL    ECONOMICS 

there  were  5,702,752  farms  in  France.  The  area 
in  farms  (exploitations)  was  122,015,015  acres. 
The  average  size  of  farms  was  21.4  acres.  But 
when  we  exclude  all  farms  which  are  less  than 
2.47  acres  (one  hectare)  the  number  of  farms 
is  reduced  to  3,467,347,  while  the  acreage  is  re- 
duced only  to  118,735,256  and  the  average  is  in- 
creased to  34.2  acres  per  farm.  This  is  the  total 
area,  which  is,  of  course,  greater  than  the  culti- 
vated area.  The  following  table  will  be  of  inter- 
est, as  it  is  comparable  to  those  for  Germany, 
England,  and  the  United  States. 

TABLE  4.    THE  FARMS  OF  FRANCE  CLASSIFIED  ACCORDING 
TO  SIZE,  1892. 


Number  of 

Percentage  of  the 

Classes  of  farms 

farms 

total  farm  area 

Less  than   2.47  acres 

2,235,405 

2-7 

2.47     to    12.35     " 

1,829,259 

II.  I 

12.35           24.71 

788,299 

11.7 

24.71           49.42 

429,407] 

49.42           74.13     " 

189,664  > 

29.0 

74.13     "    98.84     " 

92,047  J 

98.84     "  123.55     " 

53,343] 

123.55     "  247.10 

52,048 

247.10     "  494.20     " 

22,777  [ 

45-5 

494.20     "  741.30     " 

6,223 

741.30  acres  and  over 

4,280 

Total 5,702,752  100.0 

It  is  interesting  to  compare  these  tables,  and 
note  the  close  resemblance  between  Germany  and 
France  with  respect  to  the  size  of  farms,  and  then 
to  note  that  the  average  for  England  is  much 
greater.  It  would  be  exceedingly  interesting  to 


THE    SIZE    OF    FARMS 

study  the  history  of  land  tenure  in  these  three 
countries  with  a  view  to  determining  to  what  ex- 
tent social  institutions  have  determined  the  size 
of  farms  and  to  what  extent  these  variations  be- 
tween England  and  the  continent  may  be  due  to 
different  economic  conditions. 

LITERATURE 

W.  Roscher,  Nationaloekonomik  des  Ackerbaues,  Book  II, 
Chapter  IV. 

John  Stuart  Mill,  Principles  of  Political  Economy,  Book  I, 
Chapter  IX,  Section  4. 

Twelfth  Census  of  the  United  States,  Volume  V. 

Returns  as  to  the  number  and  size  of  agricultural  holdings 
in  Great  Britain  in  the  year  1895.  A  report  made  by 
P.  G.  Craigie  to  the  President  of  the  Board  of  Agricul- 
ture of  Great  Britain,  Parliamentary  Papers  (C. — 8243). 

Die  Landwirtschaft  im  Deutschen  Reichs,  14  Juni,  1895, 
Statistik  des  Deutschen  Reichs,  Neue  Folge,  Band  112. 

Flour  de  Saint-Genis,  La  Propriete  Rurale  en  France. 


135 


CHAPTER  VIII 

THE  FORCES  AND  CONDITIONS  WHICH  DETER- 
MINE  THE  PRICES  OF  AGRICULTURAL 
PRODUCTS. 

It  has  been  seen  that  one  of  the  most  important 
factors  in  determining  which  crops  should  be  se- 
lected for  the  field-system  and  the  degree  of  inten- 
sity with  which  these  crops  should  be  cultivated,  is 
the  price  for  which  the  produce  can  be  sold.  The 
question  arises,  therefore:  What  are  the  forces 
and  conditions  which  determine  the  prices  of  agri- 
cultural products? 

The  business  man  explains  prices  in  terms  of 
demand  and  supply;  and  while  it  will  be  impos- 
sible in  a  work  of  this  kind  to  enter  into  the 
philosophy  of  value,  it  may  be  worth  while  to  de- 
vote a  few  lines  to  the  significance  of  demand  and 
of  supply.  Behind  the  fact  of  demand  is  the  more 
fundamental  fact  of  human  wants.  The  desire  to 
satisfy  wants  impels  men  to  produce  supplies  of 
utilities.  The  effort  which  man  must  put  forth  in 
order  to  gain  the  means  of  satisfying  his  wants  sets 
a  limit  to  the  supply  of  valuable  utilities  or  economic 
goods  as  they  are  sometimes  called.  It  usually 
happens  that  long  before  all  of  the  wants  of  a  man 
136 


PRICES    OF    PRODUCTS 

are  satisfied,  the  pain  of  exertion  becomes  great 
enough  to  more  than  balance  the  possible  pleasure 
which  might  be  produced  by  consuming  the  prod- 
ucts of  further  exertion.  So  long  as  there  is  an 
unsatisfied  desire  for  an  article,  that  article  will 
have  some  value  placed  upon  it.  The  relative  in- 
tensity of  the  buyer's  desire  for  an  article  deter- 
mines how  highly  he  will  value  it,  and  what  price 
he  will  be  willing  to  pay  for  it ;  but  the  price  which 
must  be  paid  determines  how  completely  the  want 
will  be  satisfied, — the  higher  the  price  the  more 
intense  will  be  the  desire  which  will  be  left  unsat- 
isfied. 

On  the  other  hand  the  natural  facilities  for  in- 
creasing the  supply  will  determine  how  high  the 
price  must  be  before  the  producer  can  afford  to 
increase  the  supply.  Marshall  says :  "For  long 
periods  the  supply  price  is  that  which  is  just 
needed  to  call  forth  those  new  investments  of 
capital,  material  and  personal,  which  are  required 
to  make  up  a  certain  aggregate  volume  of  produc- 
tion."1 The  lower  the  price  at  which  the  producer 
can,  with  profit,  add  an  increment  to  the  supply, 
the  greater  the  total  supply  that  will  be  put  upon 
the  market  and  the  more  generally  it  will  be  con- 
sumed; but  the  greater  the  amount  of  an  article 
consumed,  the  less  intense  is  the  desire  for  it  and 
the  less  highly  it  is  valued.  Thus  it  is  that  the 
marginal  utility,  or  the  intensity  of  the  last  want 

1  Alfred    Marshall,   Principles   of  Economics,   third    edition, 
p.  448.  ! 


AGRICULTURAL    ECONOMICS 

which  is  satisfied  tends  to  adjust  itself  to  the  cost 
of  producing  that  share  of  the  supply  which  is 
produced  under  the  most  unfavorable  circum- 
stances. But  it  is  also  true  that  the  price  which  is 
offered  at  a  given  time,  and  which  corresponds  to 
the  marginal  utility  at  that  time,  determines  the 
maximum  amount  which  can  be  expended  in  the 
production  of  a  given  article  with  profit  and  hence 
determines  ultimately  how  far  down  the  scale  of 
less  and  less  favorable  circumstances  its  produc- 
tion can  be  carried  on.  Thus  it  is  that  the  forces 
which  lie  behind  the  demand  for  an  article,  and 
the  conditions  under  which  the  article  may  be 
supplied,  regulate  its  price. 

Let  us  apply  this  principle  to  a  concrete  case  by 
asking  the  question,  "What  determines  the  price 
of  wheat?"  The  value  which  the  wheat  con- 
sumers will  place  upon  wheat  is  determined  by  the 
intensity  of  their  desire  for  wheat  bread ;  but  the 
intensity  of  that  desire  varies  with  the  amount  per 
capita  they  are  consuming  from  day  to  day.  The 
more  they  consume  each  day,  the  less  intense  the 
desire  for  wheat,  and  the  lower  the  price  which 
the  consumers  are  willing  to  pay  for  it.  But, 
again,  the  less  the  consumers  are  willing  to  pay, 
the  fewer  are  the  farmers  who  can  introduce 
wheat  into  their  field-systems  with  profit,  and 
the  smaller  the  supply  will  tend  to  become.  Thus 
it  is  that  the  price  rises  when  the  demand  increases 
relatively  to  the  supply,  and  falls  when  the  sup- 
138 


PRICES    OF    PRODUCTS 

ply  increases  relatively  to  the  demand,  the  price 
always  being  such  as  will  form  an  equilibrium  be- 
tween demand  and  supply. 

Wheat  can  be  shipped  anywhere  in  the  world, 
so  that  it  is  the  wheat  crop  of  the  whole  world, 
and  the  demand  of  the  entire  population  of  the 
earth  for  wheat,  that  must  be  taken  into  account 
in  any  attempt  to  work  out  the  conditions  which 
determine  the  price  of  wheat  at  any  given  time. 
Many  countries  produce  more  wheat  than  they  can 
consume,  w7hile  other  countries  draw  a  part  of 
their  supply  from  abroad  every  year.  The  most 
important  countries  having  a  wheat  surplus  are : 
the  United  States,  Canada,  Argentina,  Chile,  Uru- 
guay, Austria-Hungary,  Bulgaria,  Rumania,  Rus- 
sia, Turkey,  British  East  Indies,  Australasia,  and 
North  Africa.  The  most  important  wheat- 
importing  countries  are :  Great  Britain,  Belgium, 
Denmark,  France,  Germany,  Greece,  Italy,  Neth- 
erlands, Portugal,  Spain,  Norway  and  Sweden, 
Switzerland,  Japan,  and  China. 

Wheat  is  sent  from  the  United  States  to  Eu- 
rope, where  it  competes  with  wheat  brought  from 
India.  Wheat  is  sent  from  India  to  China  and 
Japan  and  there  meets  the  product  of  the  great 
wheat  farms  of  California,  Washington,  and  Ore- 
gon. Thus  we  see  that  the  commerce  in  wheat 
is  world-wide  and  the  price  of  wheat  is  determined 
by  the  supply  and  the  demand  upon  a  market 
which  is  world-wide.  Hence  it  should  not  be  ex- 


AGRICULTURAL    ECONOMICS 

pected  that  the  price  of  wheat  will  vary  inversely 
as  the  yield  in  any  one  country;  for  the  wheat 
producing  countries  are  scattered  widely  over  the 
surface  of  the  earth,  and  the  conditions  which  re- 
duce the  crop  in  one  country  may  not  be  present 
in  other  countries,  and  hence  a  short  crop  in  one 
country  is  often  made  up  for  by  an  unusually  large 
one  in  another  country. 

The  price  of  wheat  tends  to  equal  the  cost  of 
producing  and  bringing  to  the  central  market  that 
portion  of  the  wheat  which  is  produced  and  mar- 
keted under  the  most  unfavorable  conditions, — 
the  competition  of  crops  as  well  as  natural  con- 
ditions being  taken  into  account.  This  means, 
simply,  that  if  the  intensity  of  the  desire  for  wheat 
increases  a  higher  price  is  likely  to  be  offered  for 
wheat  and  it  will  become  profitable  to  extend  its 
culture  under  conditions  where  this  crop  was  for- 
merly unprofitable ;  and  the  tendency  is  to  extend 
its  culture  to  the  point  where  the  costs  will  equal 
the  price  under  the  most  unfavorable  conditions 
of  wheat  production,  which  may  be  interpreted  as 
meaning  wheat  produced  upon  the  least  produc- 
tive wheat  land  by  the  least  efficient  farmers  which 
are  capable  of  competing  in  wheat  production.  If 
the  price  falls,  some  of  the  land  which  has  been 
used  for  wheat  production  can  no  longer  be  used 
for  this  purpose  with  profit.  Consequently  some 
of  the  farmers  who  at  the  higher  price  could  make 
a  profit  by  producing  wheat  could  no  longer  do 
140 


PRICES    OF    PRODUCTS 

so,  and  some  of  the  supply  would  be  cut  off. 
Thus  it  is  that  agriculture  must  ever  be  adjusted 
to  the  changes  in  the  prices  of  the  products. 

There  are  certain  products  which  can  be  substi- 
tuted for  each  other  and  thus  tend  to  keep  prices 
from  rising  so  high  or  sinking  so  low  as  they 
otherwise  might.  Rye  bread,  for  example,  is 
consumed  very  largely  in  northern  Europe,  and 
when  the  rye  crop  is  larger,  and  the  wheat  crop 
smaller  than  usual,  more  rye  bread  and  less  wheat 
bread  is  consumed.  When  the  rye  crop  is  smaller 
than  usual,  there  may  be  a  larger  wheat  crop  to 
balance  the  shortage  in  rye.  Thus,  it  is  the 
world's  supply  of  wheat  and  wheat  substitutes, 
and  the  world's  demand  for  bread  and  bread  sub- 
stitutes, that  fixes  the  price  of  wheat  on  the 
world's  market  at  any  given  time. 

Liverpool  is  the  center  of  the  world's  wheat 
trade,  and  the  conditions  which  regulate  the  price 
of  wheat  on  the  Liverpool  market  may  be  said  to 
regulate  the  price  throughout  the  world.  More 
wheat  is  produced  in  the  United  States  than  is 
consumed  at  home.  The  surplus  of  the  great 
wheat  producing  states  is  brought  together  at  the 
"primary"  grain  markets,1  the  most  important  of 
which  are:  Chicago,  Minneapolis,  Duluth,  Supe- 
rior, St.  Louis,  Milwaukee,  Toledo,  Kansas  City, 
Peoria,  Cincinnati,  and  Detroit.  From  these  pri- 
mary markets,  wheat  and  its  products  are  sent 

1  Report  of  the  Industrial  Commission,  1900,  Vol.  VI,  p.  45. 
141 


AGRICULTURAL    ECONOMICS 

to  the  various  parts  of  the  United  States,  where 
wheat  is  not  produced  in  sufficient  quantities  to 
supply  the  demand.  But  after  all  of  the  deficit 
areas  of  the  United  States  are  supplied,  a  large 
surplus  still  remains,  which  is  sent  abroad. 

The  price  of  wheat  in  any  primary  market  will 
equal  the  price  in  Liverpool  minus  the  charges 
made  for  putting  the  wheat  on  the  Liverpool  mar- 
ket. The  local  price  at  any  point  in  the  surplus- 
producing  regions  will  equal  the  price  at  the  near- 
est primary  market  minus  the  charges  incident  to 
putting  the  wheat  on  that  market.  The  local 
price  of  wheat  or  its  products  at  any  point  where 
less  is  produced  than  is  consumed  will  equal  the 
price  in  the  nearest  primary  market  plus  the  charges 
made  for  bringing  the  wheat  or  wheat  product 
from  that  market.  The  charges  made  for  trans- 
porting and  handling  the  grain  have  been  spoken 
of,  rather  than  the  cost  of  transporting  and  hand- 
ling the  grain,  for  the  reason  that  it  is  not  cer- 
tain that  the  charges  are  exactly  the  same  as  the 
costs  to  the  transportation  companies  and  the 
wheat  merchants,  and  yet  if  the  companies  and  the 
merchants  are  able  to  charge  more  than  sufficient 
to  pay  all  costs  this  becomes  as  important  in  de- 
termining the  price  as  if  it  actually  cost  the  com- 
pany more  to  give  the  services. 

The  circumstances  are  somewhat  different  in 
the  case  of  maize.  The  United  States  is  the  prin- 
cipal maize  producing  country,  and  nearly  the 
142 


PRICES    OF    PRODUCTS 

whole  crop  is  consumed  at  home.  Over  three- 
fourths  of  the  maize  crop  i-s  consumed  in  the  county 
where  grown.  Only  one-fifth  of  it  enters  into 
the  internal  commerce  of  the  country,  and  from 
five  to  ten  per  cent.,  only,  enters  into  foreign  dis- 
tribution. Maize  is  used  largely  for  the  feeding 
of  stock.  From  year  to  year  farmers  count  on 
selling  about  so  many  fat  cattle  and  hogs,  and  it  is 
for  this  purpose  that  most  farmers  grow  maize. 
When  the  crop  is  short,  as  in  1901,  the  shortage 
here  is  not  balanced,  as  it  is  apt  to  be  in  the  case 
of  wheat,  by  good  crops  in  other  countries,  be- 
cause there  is  no  country  which  ships  maize  to  the 
United  States  in  appreciably  large  quantities. 

The  demand  for  pork  is  fairly  regular  and  so 
is  that  for  fat  cattle,  and  the  result  of  a  short  maize 
crop  shows  itself  at  once  in  the  price  of  maize  and 
only  less  directly  in  the  price  of  pork  and  beef. 

But  the  difference  between  maize  and  wheat  with 
respect  to  the  price-determining  conditions  in  the 
United  States  is  only  one  of  degree.  This  coun- 
try is  an  exporter  of  maize  in  ordinary  years  and 
any  relatively  small  increase  in  the  size  of  the 
American  maize  crop  may  be  balanced  by  a  short 
crop  in  some  of  the  other  countries  which  com- 
pete upon  the  European  market. 

The  potato  market  is  still  more  local  than  that 
for  maize.  Each  locality  is  more  dependent  upon 
the  local  supply  and  the  price  is  influenced 
much  more  by  variations  in  the  yield  of  the  local 


AGRICULTURAL    ECONOMICS 

crop  than  in  the  case  of  maize  and  wheat.  Some 
regions  are  regularly  wheat  sellers,  others  wheat 
buyers,  from  year  to  year ;  but  in  the  case  of  pota- 
toes, the  aim  of  the  vast  majority  of  the  producers 
is  simply  to  supply  their  own  wants  or  to  meet 
the  demands  of  the  local  markets,  and  the  same 
region  may  have  a  surplus  one  year  and  a  deficit 
the  next.  The  cost  of  shipping  potatoes  is  a 
larger  percentage  of  their  total  value  than  in  the 
case  of  wheat,  and  as  the  surplus  of  one  year  can- 
not be  kept  until  the  next,  the  local  price  will  be 
relatively  low  in  case  there  is  a  surplus,  while  in 
case  of  a  deficit  the  local  price  will  be  relatively 
high.  Clover  seed  is  a  good  example  of  a  very 
uncertain  crop,  and  it  is  well  known  that,  for  this 
reason,  the  price  of  this  article  fluctuates  very 
greatly  from  year  to  year. 

The  prices  of  the  animal  products  of  the  farm 
must  necessarily  sustain  some  more  or  less  definite 
relation  to  the  prices  of  the  crops  on  which  the 
live  stock  industry  is  based.  In  general  it  is  true 
that  in  a  country  where  grazing  lands  are  abun- 
dant and  where  the  prices  of  hay  and  grain  are 
low,  the  prices  of  cattle  and  dairy  products  will 
be  lower  than  in  a  country  like  England,  where 
grazing  lands  are  scarce  and  feed  stuffs  are  dear. 

When  long  periods  are  taken  into  account,  the 
general  principle  seems  to  hold  true  in  any  single 
country  that  a  rise  in  the  price  of  feed  stuffs  will 

result  in  a  rise  in  the  prices  of  animal  products. 
144 


PRICES    OF    PRODUCTS 

The  price  of  Indian  corn  on  the  Chicago  market 
reached  its  lowest  figure  for  the  twelve  years  from 
1892  to  1903,  in  September,  1896,  when  it  was 
19.5  cents  per  bushel.  The  minimum  price  of 
hogs  on  the  same  market  for  the  same  period  was 
likewise  reached  in  September,  1896,  when  the 
lowest  was  $2.45  per  100  Ibs.  On  the  other  hand, 
the  highest  Chicago  price  of  maize  for  this  period 
is  given  at  88  cents  per  bushel,  which  price  was 
reached  in  July,  1902,  and  it  was  in  the  same 
month  of  that  year  that  the  price  of  hogs  on  the 
Chicago  market  rose  to  $8.75  per  100  Ibs.,  which 
is  the  highest  price  quoted  in  that  market  for  the 
twelve  years  under  consideration.1 

But  when  shorter  periods  are  taken  into  ac- 
count, a  rise  in  the  prices  of  feed  stuffs  is  often 
accompanied  by  a  fall  in  the  prices  of  the  live 
stock  which  is  dependent  upon  this  food  supply. 
It  is  a  matter  of  common  observation  among 
farmers  that  if  there  is  a  great  abundance  of  grain, 
hay,  and  forage  crops  available  in  the  fall  of  the 
year,  there  is  usually  a  great  demand  for  "stock 
cattle,"  and  there  is  no  rush  about  marketing  the 
fat  cattle  which  are  intended  for  the  market.  As 
a  result,  the  prices  of  cattle  are  relatively  high  in 
comparison  with  the  prices  of  the  materials  on 
which  they  are  fed.  Again  when  a  dry  summer 
cuts  the  crops  short,  so  that  the  number  of  cattle 
which  should  be  kept  through  the  winter  is  very 

1See  table  appended  to  this  chapter. 
10  145 


AGRICULTURAL    ECONOMICS 

great  in  comparison  to  the  stores  of  feed,  many 
farmers  find  it  necessary  to  sell  some  of  their 
cattle  rather  prematurely  and  at  a  very  low  price. 
Under  these  circumstances  the  prices  of  "stock 
cattle"  are  likely  to  show  a  greater  rise  or  fall 
inversely  to  the  prices  of  the  feed  stuffs,  than  are 
the  prices  of  fat  cattle  and  dairy  products. 

While  it  is  true  that  the  prices  of  hogs  and  of 
maize  reach  their  highest  level  in  the  same  month 
and  likewise  their  lowest  level  in  the  same  month, 
it  is  also  true  that  the  prices  of  hogs  tend  for  a 
time  to  fall  when  the  price  of  maize  rises.  In 
1901,  a  year  when  the  maize  crop  was  short,  the 
average  monthly  price  of  maize  rose  from  56 H 
cents  per  bushel  in  September,  to  65  cents  in  De- 
cember, during  which  time  the  average  monthly 
price  of  hogs  fell  from  $6.60  per  100  Ibs.,  in  Sep- 
tember, to  $6.27^  in  October,  to  $5.65  in  Novem- 
ber, but  rose  to  $6.00  again  in  December,  so  that 
in  the  five  months  the  price  of  hogs  fell  60  cents 
per  100  Ibs.,  while  the  price  of  maize  rose  8^€  cents 
per  bushel.1  This  situation  is  doubtless  to  be 
explained  in  part  by  the  fact  that  the  number  of 
hogs  to  be  fed  was  relatively  great  when  com- 
pared with  the  amount  of  maize  available  for  feed- 
ing purposes,  and  as  a  result  the  hogs  were  rushed 

1  See  the  high  and  low  monthly  prices  for  Indian  corn  and 
for  hogs  for  the  whole  year  1901,  as  given  in  table  appended 
to  this  chapter. 

I46 


PRICES    OF    PRODUCTS 

to  the  market  so  soon  as  they  would  be  accepted 
at  any  price. 

This  conclusion  seems  to  be  confirmed  by  the 
fact  that  while  there  were  56,982,142  hogs  on 
farms  January  i,  1901,  there  were  but  48,698,890 
on  January  i,  1902.  This  relation  between  the 
prices  of  maize  and  of  hogs  during  the  last  five 
months  of  1901,  may  be  explained  in  part,  how- 
ever, by  the  fact  that  the  supply  of  marketable 
maize  was  much  smaller  than  the  total  number  of 
bushels  produced  in  the  country,  for  the  reason 
that  much  of  the  crop  did  not  mature  properly. 
A  considerable  proportion  of  the  crop  could  not 
be  put  upon  the  market  and  that  which  was  mar- 
ketable commanded  a  high  price,  while  that  which 
could  not  be  sold  could  not  be  kept  for  any  great 
period  in  the  crib  without  deterioration,  hence  it 
was  rapidly  fed  out  regardless  of  the  high  price 
of  maize  upon  the  market. 

Perhaps  sufficient  has  been  said  to  impress  the 
careful  reader  with  the  fact  that  the  so-called  law 
of  demand  and  supply  is  but  a  very  general  state- 
ment of  the  price-determining  phenomena,  and 
that  the  conditions  and  forces  which  lie  beneath 
demand  and  supply  are  exceedingly  various  and 
complex. 

LITERATURE 

Boehm-Bawerk,  Eugen  V.,  Positive  Theory  of  Capital,  Book 

IV. 
Wieser,  F.  Von,  Natural  Value. 

147 


AGRICULTURAL    ECONOMICS 

Ely,  R.  T.,  Outlines  of  Economics,  pages  118  to  125. 
Marshall,  A.,  Principles  of  Economics,  Book  V. 
Mill,  J.  S.,  Political  Economy,  Book  III,  Chapters  I  to  IV. 
Report  of  the  Industrial  Commission,  Volume  VI,  on  The 
Distribution  and  Marketing  of  Farm  Products, 

APPENDIX  TO  CHAPTER  VIII 

The  wholesale  prices  of  Indian  corn  per  bushel,  and  of 
hogs  per  100  Ibs.,  on  the  Chicago  market,  from  January, 
1895  to  February  1005,  giving  the  highest  and  the  lowest 
price  for  each  month.1 


Date 

1895 
January  

Indian 
Corn  No.  2 
Low 
Cents 
40  *A 

TTr,rr,                  Indian 
Hoes             Corn  No.  2 
Low                   High 
Cents 
$3.70                  46 
3-6o               43^ 
3.85               45^ 

4.40          48 

4-10               54^ 
4-20               53l/i 
4-50               47^ 
3.85               44% 
3-55               36 
3.20               32 
3-20               29^ 

3.25         26% 

3-35              28# 

360          29 

3-55                    29X 

3-05               30# 

2.80           29^ 
2.70          28^ 

2.60               27^ 

2.50           25 

2  45                     22X 
of  Agriculture,   1899,  pp. 

148 

Hogs 
High 

$4.80 
4.65 
5-30 
5-40 
4-975 
5-10 
5-70 
5-40 
4-65 
4.50 
3.85 
3-75 

4-45 
4-35 
4-25 
4.15 
3-75 
3-6o 
3-65 
3-70 
3-50 

799-800, 

February.  .  .  . 

40  % 

March  

42  £6 

April 

44  3/ 

May  

46% 

June  

46% 

July  .  . 

41  ¥ 

August  ...   . 

36^ 

September  .  . 
October  
November  .  . 
December  .  . 
1896 
January.  . 

.     30^ 

.      28 

.    .26^ 
.     24% 

25  *A 

February  
March  

.     27^ 
28  1A 

April  

28% 

27  *A 

June  .... 

26% 

July  

24% 

August  

20  1A 

September  .  . 

1  Yearbook, 
814. 

•       19^ 

U.  S.  Dept. 

PRICES    OF    PRODUCTS 


Indian 
Date           Corn  No.  2 

Hogs 

Indian 
Corn  No.  2 

Hogs 

Low 

Low 

High 

High 

1896 

Cents 

Cents 

October 

22# 

2.55 

26X 

3.65 

November  .  .  . 

22^ 

2.90 

25^ 

3.70 

December..  .. 

22^ 

2.90 

23^ 

3.60 

1897 

January  

«tf 

3-00 

23tt 

3.60 

February  

21  # 

3.10 

23% 

3-75 

March  

22% 

3.35 

24/2 

4-25 

April  

23*/s 

3.50 

25X 

4-25 

May  

23 

3-25 

25/2 

4-05 

June  

23% 

3-05 

25% 

3.65 

July  

24% 

3.05 

28X 

4.00 

August  

26X 

3-45 

32% 

4-55 

September  .  .  . 

27% 

3.6o 

32 

4.65 

October  

24 

3.20 

29 

4.40 

November  .  .  . 

25% 

3.15 

27% 

3.8o 

December.... 

25 

3.10 

27l/2 

3.6o 

1898 

January  

26 

3-35 

28^ 

4.00 

February  

27% 

3.6o 

30% 

4-275 

March  

28>6 

3.65 

2gti 

4-175 

April  

28^ 

3.6o 

3SX 

4.15 

May  

32^ 

3.70 

27 

4.80 

June  

31 

3-55 

33^ 

4.50 

July  

3*X 

3.6o 

35/2 

4-175 

August  

293/ 

3-45 

33% 

4.20 

September  .  .  . 

29l/8 

3.40 

3iH 

4.15 

October  

28% 

3-25 

32# 

4.00 

November  .  .  . 

3i% 

3.10 

341A 

3.85 

December  .  .  . 

33l/s 

3-15 

38 

3-75 

1899 

January  

ZSX 

3-30 

38^ 

4-05 

February  

33% 

3-45 

37 

4.05 

March 

33 

3-50 

3W 

4.00 

April  

34 

3.50 

35^ 

4.15 

May  

32/2 

3-45 

343/* 

4-05 

June  

33% 

3-45 

35/2 

4.00 

July  

31 

3-55 

347/* 

4.70 

149 

AGRICULTURAL    ECONOMICS 


Indian  rrna,  Indian  TTr,crc 

Date           Corn  No.  2  Hogs  Corn  No.  2  Hogs 

Low  Low  High  High 

1899  Cents  Cents 

August    3oX  3-8s  33  5-00 

September...  31^  3-90  35  4-90 

October 31  3.80  33  4-9° 

November...  30^  3.55  33X  4-35 

December....  30  3.55  31^  4-45 
1900  l 

January 30^  3-70  3i#  4-Q25 

February 31%  3.70  34#  5-io 

March 33^  4.00  38^  5-525 

April 38#  4.25  40#  5.85 

May 36  4.00  40^  5.575 

June 37^  4.10  43  >£  5-425 

July 38^  4.25  44^  5-55 

August 37X  3-6o  41 X  5.575 

September...  38^  3-50  43#  5-7O 

October 36^  3-35  41 K  5-55 

November...  35  3.40  49^  5-io 

December  . . .  35^  4«oo  40^  5.45 

1901 

January 36  4.25  37^  5.475 

February 37^  5.10  40  5.65 

March 39  4.90  44  6.20 

April 41  4-40  48  6.25 

May 42#  4-15  58^  5-975 

June 41  4.25  44*/&  6.30 

July 43^  3-00  58^  6.35 

August 53^  3.00  59^  6.60 

September...  54^  3.00  59^  7-40 

October 54^  4.25  58  7.10 

November...  57^  3-75  63^  6.30 

December...  62^  4.00  67^  6.70 

1902 

January 56^  4.40  64^  6.85 

February 56^  4.40  6i#  6.85 

March 56  4.75  6i>£  7.00 

1  Yearbook,  U.  S.  Department  of  Agriculture,  1903,  pp.  591- 
592,  674. 

ISO 


1904 


PRICES    OF    PRODUCTS 

Indian  Wncro  Indian 

Date           Corn  No.  2  Corn  No.  2 

Low  Low  High  High 

1902  Cents  Cents 

April 56%  5.40  64^  7.50 

May 59>6  5.40  64^  7.50 

June 61  5.65  71^  7.95 

July 56  5-70  88  8.75 

August 54  5.30  60  7.95 

September...  57  5.50  62^  8.20 

October 55  4.50  6i>£  7.90 

November . . .  52^  4.60  58  6.95 

December...  43^  4.60  57#  6.85 
1903 

January 43^  5.00  48)^  7.00 

February 42^  5.30  45  7-55 

March 41^  6.00  45^  7.85 

April 41  #  6.30  45X  7.65 

May 44  5.10  46  7.15 

June 47#  5-25  52  6.35 

July 49  4.60  53  6.20 

August 50^  4.50  53  6.15 

September...  45^  4.85  52^  6.45 

October 43^  4.00  46  6.50 

November...  41^  3.75  44^  5.50 

December 41  3.80  43^  4.90 


January 42^  3.85  47^  5.20 

February 46  3.90  54^  5.80 

March   49  4.00  56^  5.825 

April 46^  3.75  56^  5-30 

May 47X  3-7O  50  4-95 

June 53X  4.00  59^  5-475 

July 47X  4-70  50  5-90 

August siX  4-60  55^  5.8o 

September...  51  4.70  54^  6.375 

October 50  4.40  57^  6.275 

November...  50  3.65  58>i  5.25 

December  .  . .  43^  3.60  49  4.875 
1905 

January 42  3.90  43^  5-00 

February 42^  4.10  45  >£  5.15 

1  Crop  Reporter,  U.  S.  Dept.  Agri.,  March,  1905,  p.  95. 
151 


CHAPTER  IX 
THE   DISTRIBUTION   OF  WEALTH,   WITH  ESPECIAL 

*  REFERENCE  TO  THE  RENT  OF  FARM  LAND  AND  TO  THE  CON- 
DITIONS WHICH  ENABLE  FARMERS  TO  SAVE  FROM  THEIR 
EARNINGS. 

Having  sold  his  products  upon  the  local  market, 
what  determines  the  share  of  the  gross  receipts 
which  the  farmer  may  keep  as  payment  for  his 
labor  and  enterprise,  and  what  determines  the  pro- 
portion which  must  be  paid  for  the  use  of  land 
and  capital-goods?  Farmers  of  varying  degrees 
of  efficiency  employ  capital-goods  of  varying  de- 
grees of  usefulness  upon  land  of  varying  degrees 
of  productivity.  With  these  three  variables 
united  in  varying  proportions  in  the  production 
of  articles  which  vary  in  their  market  value  from 
place  to  place  and  from  time  to  time,  the  problem 
before  us  is  to  determine  the  share  of  the  gross 
returns  which  each  factor  will  receive. 

This  is  by  no  means  a  simple  problem.  There 
is  a  very  complex  set  of  forces  and  conditions 
which  make  it  necessary  for  a  given  farmer  at  a 
given  time  and  place,  to  credit  a  certain  propor- 
tion of  his  gross  returns  to  capital-goods,  and 
another  certain  share  to  land ;  but  at  another  time 
on  the  same  farm  or  on  another  farm  at  the  same 
152 


DISTRIBUTION    OF    WEALTH 

time,  or  with  a  different  farmer  on  the  same  farm 
at  the  same  time,  the  share  of  the  gross  returns 
received  by  each  factor  may  be  different.  The 
problem  of  distribution  is  consequently  so  com- 
plex and  difficult  that  it  will  be  impossible  in  this 
work  to  do  more  than  to  indicate  in  a  general 
way  the  operation  of  the  forces  and  conditions 
which  regulate  the  distribution  of  the  product 
among  the  factors  of  production. 

Let  us  first  examine  the  different  factors  of  pro- 
duction,—  land,  capital-goods,  and  farmers, — and 
determine  if  possible  how  much  each  factor  must 
receive  in  order  that  it  may  be  induced  to  partici- 
pate in  agricultural  production.  In  this  discus- 
sion we  shall  speak  of  farmers,  as  synonymous 
with  labor,  for  the  reason  that  this  will  simplify 
the  discussion,  and  for  the  further  reason  that  in 
the  vast  majority  of  cases  most  of  the  farm  work 
is  done  by  the  farmer  and  his  family. 

The  farmer  must  receive,  at  least,  enough  to 
sustain  his  body  in  a  working  condition,  and  he 
will  usually  demand  more  than  this.  He  will 
usually  want  to  support  a  family,  and  this  is 
essential  to  the  future  supply  of  labor.  It  may 
be  said,  therefore,  that  in  the  long  run,  the  least 
return  that  will  induce  men  to  become  farmers  is 
maintenance  for  themselves  and  their  families 
in  accordance  with  the  "standard  of  life,"1  which 

1  "The   number   and   character   of   the   wants   which   a   man 
considers  more  important  than   marriage  and  family  consti- 

153 


AGRICULTURAL    ECONOMICS 

seems  to  them  essential  to  happiness.  It  is  true 
that  many  farmers  always  receive  as  their  share  of 
the  product,  more  than  this  necessary  minimum. 
This  is  generally  true  of  the  more  efficient  farm- 
ers ;  but  the  marginal  farmers  may  be  thought  of 
as  receiving  this  minimum  when  long  time  aver- 
ages are  taken  into  account. 

There  will  always  be  fluctuations ;  there  will  be 
times  when  the  demand  for  farmers  is  great  rela- 
tively to  the  supply,  and  as  a  result  even  the  mar- 
ginal farmers  will  receive  more  than  the  necessary 
minimum  which  is  required  to  induce  them  to  par- 
ticipate in  agricultural  production.  This  condi- 
tion of  affairs  would  make  agriculture  a  very  at- 
tractive pursuit,  however,  and  the  tendency  would 
be  for  men  from  other  pursuits  to  be  attracted  into 
agriculture;  or  at  least  for  a  smaller  proportion 
of  each  generation  of  farm  boys  to  enter  the  in- 
dustries of  the  cities,  and  in  the  course  of  time  the 
competition  would  drive  the  profits  of  the  mar- 
ginal farmer  down  to  the  minimum. 

Again,  the  number  of  competing  farmers  may 
become  too  great,  so  that  the  returns  of  the  mar- 
ginal farmers  will  be  depressed  far  below  the  nec- 
essary minimum;  but  this  would  result  in  the 
elimination  of  some  of  the  less  efficient  farmers, 
and  perhaps  others  as  well,  who  would  decide  they 
could  do  better  in  some  other  industry.  To  the 

tute   his  'standard   of   life.'"      (R.  T.  Ely,   Outlines  of  Eco- 
nomics, p.  181.) 

154 


DISTRIBUTION    OF    WEALTH 

extent  that  these  marginal  farmers  are  eliminated, 
a  higher  grade  of  farmers  will  be  found  upon  the 
margin.  These  new  marginal  farmers  will  be 
able  to  make  a  living  for  themselves  and  their 
families  and  give  a  larger  share  of  the  gross 
returns  to  the  other  factors  than  could  the  less 
efficient  competitors  who  have  been  crowded  out. 
The  elimination  of  some  of  the  farmers  would 
also  relieve  to  some  extent  the  pressure  of  compe- 
tition. As  a  result  of  the  lifting  of  the  margin 
to  more  efficient  farmers  and  of  this  lessened  com- 
petition the  returns  to  the  marginal  farmers  will 
tend  to  be  adjusted  to  the  minimum  which  the 
standard  of  life  of  these  marginal  farmers  makes 
necessary  to  induce  them  to  participate  in  agricul- 
tural production. 

The  share  of  the  product  which  the  more  effi- 
cient farmers  are  able  to  command  will  be  taken 
up  later,  since  for  the  sake  of  simplicity,  it  has 
been  thought  best  to  continue  first  the  discussion 
of  the  conditions  and  forces  which  regulate  the 
distribution  of  their  gross  product  among  the 
grades  of  the  factors  which  are  brought  together 
on  the  margin, — that  is  among  the  least  efficient 
farmers,  and  the  least  productive  land  in  use  and 
the  least  productive  grades  of  capital-goods. 

On  the  margin  where  the  least  productive  of  all 
of  the  factors  of  production  are  brought  together, 
there  is  no  chance  for  a  differential  return  to  be 
commanded  by  any  of  the  factors.  There  is  no 

iS5 


AGRICULTURAL    ECONOMICS 

return  to  land  except  enough  to  pay  for  bringing 
it  into  cultivation,  and  this  should  perhaps  be 
counted  as  return  to  the  capital-goods  employed 
in  bringing  the  land  under  cultivation,  in  which 
case  the  whole  product  could  be  said  to  be  divided 
between  the  farmers  and  the  capital-goods.  With 
this  in  mind  it  might  seem  the  simplest  explana^ 
tion  of  the  return  to  marginal  capital-goods,  to 
say  that  all  of  the  return  except  the  necessary 
minimum  demanded  by  the  farmers  must  be 
credited  to  capital-goods.  This  may  tend  to  be 
true,  and  yet  it  explains  nothing.  It  leaves  un- 
answered the  question  why  it  is  that  less  produc- 
tive land  is  not  cultivated  at  a  given  time,  for 
the  farmers  might  receive  their  necessary  mini- 
mum from  such  land,  although  this  would  result 
in  a  reduction  in  the  return  which  could  be 
credited  to  capital-goods.  It  becomes  evident 
therefore  that  the  return  to  capital-goods  is  regu- 
lated by  a  set  of  more  or  less  independent  forces. 
It  is  well  understood  that  capital-goods  must  be 
kept  intact,  that  seed  grains  must  be  replaced, 
that  when  a  machine  is  broken  it  must  be  put  in 
repair,  and  when  it  is  worn  out  it  must  be  replaced, 
and  that  the  horses  must  be  fed  and  cared  for ;  but 
beyond  this  amount  which  is  necessary  for  main- 
tenance, a  certain  amount  must  be  paid  for  the 
use  of  capital-goods.  This  return  is  usually  ex- 
pressed in  terms  of  an  annual  rate  per  cent,  upon 
the  value  of  the  capital-goods,  but  there  is  no  good 

156 


DISTRIBUTION    OF    WEALTH 

reason  why  it  should  not  be  thought  of  as  the  hire 
paid  for  the  use  of  the  capital-goods. 

The  marginal  farmer  and  the  marginal  capital- 
goods  must,  on  the  long  time  average,  be  main- 
tained, and  the  hire  of  the  capital-goods  must  be 
paid.  As  land  which  will  not  produce  this  much 
will  not  be  brought  under  cultivation,  it  is  clearly 
the  return  demanded  by  farmers  for  labor  and  the 
use  of  capital-goods  which  determines  the  margin 
of  cultivation,  and  not  the  productivity  of  the 
marginal  land  which  determines  the  amount  which 
is  paid  for  the  use  of  capital-goods.  But  why  is 
it  that  more  must  be  paid  for  the  use  of  capital- 
goods  than  sufficient  to  keep  such  goods  intact? 
In  other  words,  why  must  a  hire  be  paid  for  the 
use  of  capital-goods  ? 

First,  the  supply  is  limited.  The  supply  can- 
not be  increased  indefinitely  without  some  sacri- 
fice of  the  gratification  of  present  desires.  Men 
are  usually  desirous  of  laying  up  something  for 
the  future,  but  they  are  more  concerned  with  the 
gratification  of  present  wants  until  the  latter  are 
partially  satisfied.  That  is;  men  value  the  means 
of  gratifying  their  present  wants  more  highly  than 
they  do  the  means  of  gratifying  the  wants  of 
of  the  future,  and  as  a  result,  after  saving  has 
reached  a  certain  point,  they  will  not  refrain  from 
consuming  wealth  to-day  in  order  that  it  may  be 
turned  into  capital-goods,  unless  they  have  the 
assurance  that  a  greater  amount  of  wealth  will  be 

iS7 


AGRICULTURAL    ECONOMICS 

returned  to  them  in  the  future.  In  old  countries 
where  there  is  much  wealth  already  accumulated 
in  the  various  forms  of  capital-goods,  the  present 
wants,  of  the  wealthier  classes  at  least,  are  more 
completely  satisfied,  and  future  wants  are  esti- 
mated relatively  more  highly  than  in  a  poor  coun- 
try where  present  wants  are  more  intense.  Hence 
the  amount  of  hire  which  must  be  paid  for  the  use 
of  capital-goods  will  be  smaller  in  wealthy  coun- 
tries than  in  countries  where  little  wealth  has  been 
accumulated. 

While  the  fact  that  the  supply  of  capital-goods 
cannot  be  increased  without  labor  and  the  fact 
that  present  goods  are  valued  more  highly  than 
future  goods  explain  why  something  must  be  paid 
for  the  use  of  capital-goods,  these  circumstances 
do  not  account  for  the  fact  that  men  are  willing 
to  pay  a  price  for  the  use  of  capital-goods.  Men 
are  willing  to  pay  a  hire  for  the  use  of  capital- 
goods  because  these  goods  aid  in  production. 
The  farmer  can  stir  more  ground  or  reap  more 
grain  in  a  day,  he  can  produce  more  goods  for  the 
market  in  a  year,  when  he  uses  plows,  reapers, 
horses,  etc.,  than  when  he  labors  unaided  by  these. 

These  then  are  the  forces  and  conditions  which 
lie  behind  the  supply  of  and  the  demand  for  capi- 
tal-goods, and  which  regulate  the  amount  of  hire 
which  is  paid  for  their  use.  The  greater  the  op- 
portunities for  gaining  a  profit  by  employing 
them,  the  greater  will  be  the  demand  for  capital- 
158 


DISTRIBUTION    OF    WEALTH 

goods  and  the  higher  the  price  which  will  be 
offered  to  induce  men  to  sacrifice  present  for 
future  goods.  This  explains  in  part  the  high 
price  which  is  paid  for  the  use  of  capital-goods. 
On  the  other  hand,  the  higher  the  price  the  fewer 
will  be  the  opportunities  for  investing  capital- 
goods  with  profit,  and  thus  the  demand  is  limited 
in  part  by  the  conditions  of  supply. 

We  have  now  reviewed  the  conditions  and 
forces  which  seem  to  determine  the  distribution 
of  the  gross  returns  of  the  marginal  farmers 
operating  marginal  capital-goods  upon  marginal 
land,  but  to  complete  the  theory  of  distribution  it 
is  necessary  to  explain  the  conditions  and  forces 
which  determine  the  distribution  of  the  gross 
returns  of  the  more  productive  grades  of  the  fac- 
tors of  production.  The  more  efficient  farmer 
is  able  to  command  more  than  the  minimum  which 
is  necessary  to  the  marginal  farmer;  this  is  like- 
wise true  of  the  more  productive  grades  of  capital- 
goods,  and  all  the  more  productive  grades  of  land 
afford  a  return  to  the  owners. 

The  share  of  the  gross  return  which  is  at- 
tributed to  land  varies  from  place  to  place  because 
of  variations  in  the  productivity  of  land.  Other 
things  remaining  the  same,  the  more  fertile  the 
soil  and  the  higher  the  local  market  prices  which 
can  be  obtained  for  the  products  of  the  farm,  or — 
to  state  the  same  thing  in  other  words — the  more 
productive  the  land,  the  keener  will  be  the  compe- 


AGRICULTURAL    ECONOMICS 

tition  for  its  use  and  the  higher  will  be  the  rent 
which  the  farmers  will  offer  for  it.  In  a  progres- 
sive society  the  least  productive  land  which  is  re- 
quired for  supplying  the  market  at  a  given  time 
will  command  rent  enough  to  pay  for  bringing  it 
under  cultivation ;  but  this  rent  is,  in  reality,  paid 
for  the  use  of  capital-goods.  Such  land  is  called 
marginal  land.  It  has  often  been  called  no-rent 
land,  because  no  differential  rent  is  paid  for  its 
use,  and  the  differential  rent  is  the  only  distinct- 
ively land  rent.  All  land  which  is  more  produc- 
tive than  the  marginal,  will  have  a  rent  paid  for 
its  use.  Because  it  is  more  desirable,  the  farmers 
will  compete  for  the  more  productive  land  until 
the  rent  rises  to  a  point  where  they  find  it  equally 
desirable  to  take  the  less  productive  land  at  a  lower 
rent. 

If  land  were  the  only  factor  which  varies  in 
productivity,  it  would  be  a  very  easy  matter  to 
state  the  law  of  rent ;  for  then  all  of  the  farmers 
and  all  of  the  capital-goods  would  tend  to  receive 
the  minimum,  which  is  just  enough  to  enlist  in 
the  industry  the  least  productive  grades  of  these 
factors.  Under  these  conditions  the  total  return 
minus  the  necessary  minimum  to  labor  and  capital- 
goods  would  be  credited  to  land. 

This  may  be  illustrated  by  means  of  a  diagram. 

In  Figure  4,  the  line  A  B  represents  the  various 

grades  of  land  arranged  in  accordance  with  their 

degrees  of  productivity,  the  most  productive  being 

160 


DISTRIBUTION    OF    WEALTH 

at  A  and  the  least  productive  land  in  use,  or  mar- 
ginal land,  at  B.  The  value  of  the  product  is  rep- 
resented by  the  perpendicular  distance  from  line 
AB  to  line  C  Dr.  That  share  of  the  value  of  the 


FIG.  4 

product  represented  by  the  perpendicular  distance 
between  lines  A  B  and  E  E'  may  be  looked  upon 
as  the  necessary  minimum  required  to  enlist  the 
capital-goods,  and  that  share  represented  by  the 
perpendicular  distance  between  E  E'  and  D  D' 
may  be  looked  upon  as  the  necessary  return  to 
the  farmers.  The  remainder,  measured  by  the 
perpendicular  distance  between  lines  D  D'  and 
C  D',  varying  from  nothing  on  the  margin  to  a 
very  large  share  of  the  gross  returns  on  the 
most  productive  land,  would  then  represent  the 
differential  rent  of  the  land. 

Attention  should  be  called  to  the  fact  that  in 
the  illustration  (Fig.  4)  the  lines  E  E'  and  D  D' 
are  not  parallel  to  line  A  B,  that  a  larger  amount 
ii  161 


AGRICULTURAL    ECONOMICS 

per  acre  of  land  is  represented  as  being  attributed 
to  the  farmers  and  to  the  capital-goods  on  the 
more  productive  than  on  the  less  productive 
grades.  This  is  intended  to  indicate  that  even 
under  the  conditions  of  homogeneous  farmers  and 
homogeneous  capital-goods  the  more  productive 
grades  of  land  would  be  farmed  more  intensively, 
and  hence  a  larger  amount  per  unit  of  land  would 
be  credited  to  these  factors. 

The  fact  that  these  more  productive  grades  of 
land  are  cultivated  more  intensively  and  that  a 
larger  amount  is  for  this  reason  credited  to  the 
other  factors  from  each  acre  of  land,  does  not 
lessen  the  amount  of  rent,  but  rather  increases  the 
amount  which  can  be  paid  for  the  use  of  the  more 
productive  land.  That  the  best  land  can,  with 
profit,  be  cultivated  more  intensively  when  less  pro- 
ductive land  must  be  resorted  to,  than  when  the 
supply  of  best  land  exceeded  the  demand;  and  that 
this  results  in  a  greater  rent  being  paid  for  the  more 
productive  land  than  the  surplus  over  costs  which 
would  result  from  farming  such  land  to  that  degree 
of  intensity  which  paid  best  when  it  could  be  had 
free,  was  recognized  and  elucidated  by  Ricardo. 

To  illustrate  the  influence  of  variations  in  the 
intensity  of  culture  upon  the  amount  of  differen- 
tial rent  which  will  be  paid  for  the  better  grades 
of  land  when  less  productive  land  must  be  resorted 
to  in  order  to  supply  the  demand  for  agricultural 
products,  suppose  that  a  farmer  has  three  grades 
163 


DISTRIBUTION    OF    WEALTH 

of  land  to  choose  from.  These  three  grades  of 
land  are  represented  by  letters  A,  B,  and  C  (Fig. 
5),  the  latter  being  marginal  land.  The  curves 


Y   z 


FIG  5 


H  A  I,  HB  I,  and  H  C I  represent  the  increasing 
and  diminishing  returns  to  succeeding  units  of 
labor  and  capital-goods  upon  the  different  grades 
of  land.  We  have  made  this  somewhat  more 
simple  than  the  actual  conditions  by  taking  a  case 
where  the  lines  of  increasing  and  diminishing  re- 
turns have  a  definite  relation  to  each  other.  The 
largest  gross  return  per  unit  of  labor  and  capital- 
goods  will  be  gained  from  each  of  these. three 
pieces  of  land  when  X  units  (measured  by  line 
H  X,  in  Fig.  5 )  have  been  expended.  With  this 
expenditure  upon  each  of  the  three  grades  of  land, 
the  value  of  the  product  which  a  given  farmer  can 
produce  on  A  grade  land  will  be  represented  by 
the  area  H  M  N  X;  that  of  B  grade  land,  by  the 
area  H  L  O  X;  and  that  of  C  grade  land,  by  the 
area  H  K  P  X.  But,  the  same  amount  of  labor 
and  capital-goods  will  not  be  applied  to  the  three 

163 


AGRICULTURAL    ECONOMICS 

grades  of  land.  It  will  prove  profitable  to  farm 
the  more  productive  land  more  intensively  before 
it  will  prove  profitable  to  farm  the  less  productive 
land  at  all.  When  it  is  profitable  for  a  farmer  to 
apply  X  units  to  C  grade  land  it  will  prove  equally 
profitable  for  him  to  apply  Y  units  to  B  grade 
land  and  Z  units  to  A  grade  land. 

We  are  now  in  a  position  to  see  more  clearly  the 
influence  of  varying  degrees  of  intensity  of  cul- 
ture upon  differential  rents.  In  the  illustration 
the  surplus  which  a  given  farmer  can  produce  on 
A  grade  land  ( Fig.  5 ) ,  over  what  he  can  produce 
on  C  grade  land  is  represented  by  the  area 
K  M  N  E,  which  is  greater  than  the  area 
KMNP  by  the  area  P  N  E;  but  the  area 
K  M  N  P  measures  the  difference  in  the  value  of 
the  product  which  he  could  produce  on  the  two 
pieces  of  land  with  the  same  outlay.  The  surplus 
which  the  same  farmer  can  produce  upon  B  grade 
land,  over  what  he  can  produce  upon  C  grade  land 
is  represented  by  the  area  K  L  O  D;  that  of  A 
grade  land  over  B  grade  by  area  L  M  N  E  D  0. 
Hence,  it  is  not  simply  differences  in  productivity 
with  the  same  outlay,  but  it  is  the  differences  in 
the  capacity  of  the  land  to  yield  a  surplus,  that 
determines  how  much  more  highly  a  farmer  will 
estimate  one  piece  of  land  than  another  of  the 
same  area. 

The  theory  of  rent  would  be  quite  simple  if  it 
could  be  said  that  the  differential  rent  of  land  is 
164 


DISTRIBUTION    OF    WEALTH 

measured  by  the  amount  of  surplus  over  costs 
which  can  be  produced  upon  a  given  grade  of  land. 
But  this  is  not  true.  The  farmers  who  are  quali- 
tatively more  efficient  find  greater  opportunity  for 
the  employment  of  their  superior  skill  and  knowl- 
edge upon  the  more  productive,  than  upon  the 
less  productive  land.  The  farmers  who  possess 
a  relatively  high  degree  of  qualitative  efficiency 
can  win  a  larger  return  from  land  of  any  grade 
than  can  their  less  efficient  competitors,  but  this 
extra  product  due  to  superior  ability  is  greater 
on  the  more  productive  than  on  the  less  productive 
land  and  for  this  reason  the  more  efficient  farm- 
ers compete  only  for  the  more  productive  land, 
and  are  willing  to  pay  more  for  it  than  the  less 
efficient  farmers  can  afford  to  pay.  The  qualita- 
tively less  efficient  farmers  go  on  competing  for 
the  less  productive  land  until  marginal  farmers  are 
shifted  to  marginal  land.  Hence,  the  difference 
between  the  rent  of  marginal  land  and  that  of  the 
more  productive  land  cannot  be  measured  in  terms 
of  differences  in  the  amount  of  the  surplus  which 
would  exist  if  land  were  the  only  factor  which 
varies  in  productivity. 

This  can  be  illustrated  by  means  of  a  diagram. 
In  Fig.  6  the  land  is  represented  as  varying  in 
productivity  from  left  to  right,  the  most  produc- 
tive land  being  at  the  left,  and  called  A  grade 
land;  the  least  productive  being  at  the  right  and 
called  B  grade  land.  (For  the  sake  of  simplicity, 
165 


AGRICULTURAL    ECONOMICS 

it  will  be  assumed  in  this  illustration,  that  the 
same  degree  of  intensity  of  culture  exists  through- 
out the  area  under  consideration.)  The  perpen- 
dicular distances  represent  the  value  of  the  prod- 
uct. The  distance  A  C  represents  the  value  of 
the  product  which  the  most  efficient  farmer  can 
produce  upon  the  most  productive  land,  the  dis- 
tance B  C'  represents  the  value  of  the  product 
which  the  same  farmer  could  produce  upon  mar- 
ginal land.  The  distance  A  D  represents  the 
value  of  the  product  which  the  marginal  farmer 
could  produce  upon  the  most  productive  land,  the 
distance  B  Dr  represents  the  value  of  the  product 
\vhich  the  marginal  farmer  can  produce  upon 
marginal  land.  (To  facilitate  the  discussion,  we 
shall  call  the  former  the  C  grade  farmer  and  the 
latter  the  D  grade  farmer.) 

Let  it  be  supposed  that  the  land  which  is  neces- 
sary to  supply  the  demand  for  a  certain  class  of 
agricultural  products,  such,  for  example,  as  the 
diversified  agriculture  of  the  corn  belt,  varies  in 
productivity  from  A  to  B,  that  A  grade  land  is 
twice  as  productive  as  B  grade  land,  and  that  all 
other  land  under  consideration  is  more  productive 
than  B  and  less  productive  than  A  grade  land. 
Let  it  be  supposed,  also,  that  all  of  the  farmers 
who  are  able  to  compete  for  the  use  of  this  land 
at  a  given  time  vary  in  qualitative  efficiency  from 
C  to  D  (as  represented  in  Fig.  6),  that  the  farmer 
who  has  C  degrees  of  efficiency  is  qualitatively 
166 


DISTRIBUTION    OF    WEALTH 

twice  as  efficient  as  the  one  who  possesses  D 
degrees  of  efficiency,  and  that  the  other  farmers 
are  graded  according  to  their  efficiency  from  C  to 


FIG.  6 

D,  as  the  land  is  graded  from  A  to  B.  The 
farmer  who  possesses  C  degrees  of  efficiency  can 
produce  twice  as  much  on  land  of  any  grade  as 
can  the  farmer  with  D  degrees  of  efficiency.  The 
D  grade  farmer  is  the  marginal  farmer,  and  must 
receive  enough  on  marginal  land  to  cover  costs, 
including  a  living.  On  the  A  grade  land,  which 
is  twice  as  productive  as  the  marginal  land,  he  can 
produce  twice  as  much  with  the  same  outlay,  and 

167 


AGRICULTURAL    ECONOMICS 

is  willing  to  pay  a  differential  rent  for  it  equal  to 
one-half  of  the  product. 

Let  it  be  said  that  the  D  grade  or  marginal 
farmer's  product  on  B  grade  land  is  valued  at  n 
(represented  by  the  line  B  Dr  in  Fig.  6),  that  his 
product  upon  A  grade  land  is  valued  at  2n  (rep- 
resented by  the  line  AD),  and  that  he  is  willing 
to  pay  a  differential  rent  of  n  (line  ED),  for  the 
use  of  A  grade  land.  Then  the  value  of  the  prod- 
uct of  the  C  grade  farmer,  who  is  qualitatively 
twice  as  efficient  as  the  marginal  farmer,  will  be  2n 
(line  B  C')  on  B  grade  land,  and  411  (line  AC) 
on  A  grade  land.  Thus,  while  the  C  grade 
farmer  can  gain  an  extra  product  valued  at  n  (line 
D'  C')  on  B  grade  land,  his  extra  product  on  A 
grade  land,  above  what  the  D  grade  farmer  could 
produce,  is  valued  at  2n  (line  DC).  Hence  the 
C  grade  farmer  will  not  compete  for  B  grade  land 
until  the  rent  on  A  grade  land  rises  sufficiently  to 
absorb  half  of  this  extra  product,  so  that  his  net 
profit  will  be  the  same  on  both  pieces  of  land. 
Until  rent  rises  to  zn  on  A  grade  land  (that  is,  to 
point  K  in  Fig.  6,  and  measured  by  the  line  E  K) , 
the  personal  profit  which  the  C  grade  farmer  can 
win  on  such  land  will  be  greater  than  that  which 
he  could  win  from  B  grade  land.  If  the  differen- 
tial rent  of  A  grade  land  should  rise  to  zn  (that 
is,  to  point  K),  the  C  grade  farmer's  personal 
profits  on  A  grade  land  (represented  by  line  K  C), 
would  be  the  same  as  that  which  he  could  win 
168 


DISTRIBUTION    OF    WEALTH 

on  B  grade  land  (represented  by  line  Df  C') ,  being 
valued  at  n  in  either  case.  But,  while  the  C  grade 
farmer  will  pay  a  rent  of  2n  for  A  grade  land 
rather  than  farm  marginal  land,  the  D  grade 
farmer  will  take  marginal  land  rather  than  pay 
more  than  n  for  A  grade  land.  With  the  given 
hypothesis  the  differential  rent  of  A  grade  land 
will  not  be  less  than  n  (measured  by  line  ED), 
for  the  D  grade  farmer  can  afford  to  pay  that 
much  for  its  use;  and  it  will  not  rise  higher  than 
2M  (measured  by  the  line  EK),  for  the  C  grade 
farmer  would  then  prefer  marginal  land  for  which 
no  differential  rent  is  charged. 

With  all  grades  of  farmers  competing  for  the 
use  of  land,  the  differential  rent  of  A  grade  land 
will  be  greater  than  n ;  for,  at  rent  of  n,  all  but  the 
marginal  farmers  will  prefer  it  to  inferior  land, 
because  the  extra  product,  due  to  superior  qualita- 
tive efficiency,  is  greater  on  the  more  productive 
land.  To  the  extent  that  the  better  farmers  fol- 
low their  highest  economic  self-interest  they  will 
compete  for  the  better  land,  and  the  rent  of  such 
land  will  rise,  until,  one  by  one,  the  less  efficient 
farmers  find  it  preferable  to  take  less  productive 
land  at  a  lower  rent.  The  farmers  who  are  quali- 
tatively most  efficient  can  pay  more  for  the  best 
land  than  any  of  his  competitors  can  afford  to  pay 
and  still  receive  a  larger  net  profit  than  he  would 
receive  from  the  less  productive  land  at  the  rents 
which  the  less  efficient  farmers  pay  for  such  land. 

169 


AGRICULTURAL    ECONOMICS 

When  each  farmer  has  taken  the  land  for  which 
his  degree  of  efficiency  enables  him  to  compete 
to  the  best  advantage,  the  marginal  farmer  will  be 
found  upon  the  marginal  land,  the  average  farmer 
upon  the  average  land,  and  the  most  efficient 
farmer  upon  the  most  productive  land.  The 
product  resulting  from  this  most  economical  ap- 
plication of  efficiency  to  productivity  will  be  meas- 
ured by  the  area  A  C  D'  B  (Fig.  6).  It  will  be 
noticed  that  the  line  C  Dr  is  not  a  straight  line. 
This  is  not  a  straight  line  because  its  distance  from 
the  line  A  B  is  determined  by  multiplying  produc- 
tivity by  efficiency,  both  of  which  are  decreasing 
factors  as  we  go  from  the  most  productive  to  the 
marginal  land.  With  regular  and  close  grada- 
tion of  land  and  of  farmers  this  line  would  tend 
to  be  a  regular  curve.  This  curve  will  probably 
be  irregular,  however;  for  the  continuous  and 
regular  gradation  of  land  and  of  farmers  which 
would  be  necessary  to  produce  a  regular  curve, 
gradually  falling  from  C  to  D',  could,  perhaps, 
never  be  found. 

The  line  XD',  which  may  be  called  the  rent 
curve  to  distinguish  it  from  the  product  curve 
CD',  is  drawn  arbitrarily  to  illustrate  the  way 
in  which  rent  will  rise  above  the  line  D  Df,  which 
line  represents  the  level  to  which  the  rent  could 
rise  on  the  various  grades  of  land  if  all  farmers 
possessed  the  same  degree  of  qualitative  efficiency 
as  the  marginal  farmers.  Point  X  will  be  some 
170 


DISTRIBUTION    OF    WEALTH 

place  between  D  and  K,  because,  as  has  been 
shown,  the  differential  rent  of  A  grade  land  can 
neither  be  less  than  n  nor  more  than  2n.  Thus 
the  area  E  D  Df  (Fig.  6)  represents  the  differ- 
ential rent  under  the  assumption  that  all  farmers 
have  the  same  degree  of  qualitative  efficiency  as 
the  marginal  farmers,  and  the  area  D  X  D'  repre- 
sents the  further  differential  which  arises  from 
variations  in  the  efficiency  of  the  farmers.  These 
two  constitute  the  differential  rent  which  would 
be  paid  under  the  conditions  assumed;  namely, 
with  homogeneous  capital-goods,  equally  intensive 
culture  on  all  land,  and  perfect  competition. 

The  remainder  of  the  surplus  represented  by 
area  X  CD'  would  go  to  the  farmers  as  personal 
profits,  the  amount  of  personal  profit  received  by 
a  given  farmer  depending  upon  his  relative  degree 
of  qualitative  efficiency. 

Another  method  of  illustrating  the  distribution 
of  the  proceeds  among,  the  factors  of  production 
is  as  follows:  Suppose  six  grades  of  farmers, 
represented  by  letters  A,  B,  C,  D,  E,  and  F  are  in 
competition  for  as  many  grades  of  land  designated 
as  ist,  2d,  3d,  4th,  5th,  and  6th  grade  land.  Let 
us  assume  that  on  any  grade  of  land  the  A  grade 
farmer  can  secure  a  gross  return  twice  as  great, 
with  a  given  outlay,  as  the  F  grade  farmer  can 
secure,  and  that  the  gradation  in  the  qualitative 
efficiency  of  the  farmers  is  continuous  and  regular 
from  the  A  grade  to  the  F  grade  farmer.  Let  it 
171 


AGRICULTURAL    ECONOMICS 

further  be  assumed  that  any  of  these  farmers  can 
secure  twice  as  large  a  return  on  the  ist  grade 
land  from  a  given  outlay  as  he  can  secure  on  6th 
grade  land,  and  that  the  gradation  of  the  land  is 
continuous  and  regular  from  the  first  to  the  sixth 
grade. 

With  these  assumptions  in  mind  let  the  follow- 
ing figures  represent  the  value  of  the  gross  prod- 
uct which  the  farmers  of  the  respective  grades  can 
produce  as  a  result  of  the  employment  of  a  given 
quantity  of  labor  and  capital-goods  on  the  differ- 
ent grades  of  land.  To  make  this  illustration  in- 
clude the  factor  of  variations  in  intensity  of  cul- 
ture we  have  taken  a  fixed  amount  of  expendi- 
ture instead  of  a  fixed  area  of  land.  If,  therefore, 
one  acre  be  the  area  of  the  6th  grade  land  on  which 
this  fixed  amount  of  expenditure  is  made,  less  than 
an  acre  of  the  more  productive  grades  of  land  will 
be  associated  with  the  given  amount  of  labor  and 
capital-goods,  for  the  more  productive  the  land  the 
more  intensive  the  culture. 

GRADES  OF  LAND 


Grades  of 

Farmers. 

ISt. 

2nd. 

3rd. 

4th. 

sth. 

6th. 

A 

20 

18 

16 

14 

12 

10 

B 

18 

16.2 

14-4 

12.6 

10.8 

9 

C 

16 

14.4 

12.8 

II.  2 

9.6 

8 

D 

14 

12.6 

II.  2 

9-8 

8.4 

7 

E 

12 

10.8 

9.6 

8.4 

7.2 

6 

F 

10 

9 

8 

7 

6 

5 

Competi- 

live  rent ...  7.25        5,40        3.75        2.30          1.05         o 

It  is  fair  to  assume  that  the  F  grade  or  mar- 
172 


DISTRIBUTION    OF    WEALTH 

ginal  farmer  when  operating  6th  grade  or  mar- 
ginal land  will  just  be  able  to  make  a  living  with- 
out paying  any  rent  for  the  use  of  the  land.  But 
if  the  F  grade  farmer  can  make  a  living  on  6th 
grade  land  when  he  has  no  rent  to  pay,  he  can 
make  a  living  and  something  more  on  the  5th 
grade  land,  and,  if  we  think  of  the  figures  in  the 
illustration  as  representing  dollars,  the  F  grade 
farmer  can  afford  to  pay  just  one  dollar  as  rent 
for  the  quantity  of  5th  grade  land  on  which  he 
would  make  the  same  outlay  as  on  an  acre  of  the 
6th  grade  land,  for  instead  of  a  product  worth 
five  dollars  he  secures  a  product  worth  six  dollars. 
Following  the  same  reasoning  the  F  grade  farmer 
could  afford  to  pay  two  dollars  for  the  4th  grade 
land,  three  dollars  for  the  3d  grade,  four  for  the 
2d,  and  five  dollars  for  the  quantity  of  ist  grade 
land  on  which  he  would  employ  the  given  amount 
of  labor  and  capital-goods  in  farming  that  land  to 
the  most  economical  degree  of  intensity. 

.When  all  of  the  grades  of  land  are  viewed  from 
the  standpoint  of  the  A  grade  farmer,  it  becomes 
apparent  that  he  would  be  able  to  make  more  than 
a  living  on  land  of  any  of  these  grades,  and  that 
he  would  do  as  well  to  pay  a  rent  of  two  dollars 
for  the  use  of  5th  grade  land,  four  dollars  for  4th 
grade  land,  six  for  the  3d,  eight  for  the  2d,  and  ten 
for  the  ist  grade  land,  as  to  farm  the  6th  grade 
land  rent  free;  and  in  our  illustration  we  shall 
assume  that  the  F  grade  farmer  is  needed  to  sup- 

173 


AGRICULTURAL    ECONOMICS 

ply  the  demand  for  farmers  when  the  six  grades 
of  land  are  in  use,  and  as  he  cannot  pay  any  rent 
for  its  use  it  is  fair  to  assume  that  no  other  farmer 
will  pay  anything  for  its  use.  All  of  the  farmers 
who  possess  a  higher  degree  of  qualitative  effi- 
ciency than  the  F  grade  farmer  are  in  a  position 
to  pay  more  for  the  more  productive  grades  of 
land  than  the  F  grade  farmer  can  possibly  pay, 
and  still  secure  a  larger  net  return  on  their  invest- 
ments than  they  can  make  on  marginal  or  F 
grade  land  when  the  latter  is  rent-free.  It  be- 
comes evident,  therefore,  that  the  F  grade  farmer 
will,  under  keen  competition,  be  confined  to  the 
6th  grade  land  and  that  in  a  competition  for  the 
other  grades  of  land  he  is  not  able  to  bid  high 
enough  to  make  it  desirable  for  any  of  the  more 
efficient  farmers  to  prefer  the  6th  grade  land. 

But  the  question  before  us  is,  how  much  rent 
will  the  competition  among  the  farmers  of  the 
various  grades  of  farmers  induce  them  to  pay 
for  the  various  grades  of  land?  Under  the  hy- 
pothesis that  the  F  grade  farmer  and  the  6th  grade 
land  are  both  needed  to  supply  the  demand  at  a 
given  time  and  with  a  given  price  level,  competi- 
tion will  leave  a  minimum  return  of  five  dollars 
to  the  F  grade  farmer  when  he  confines  his  atten- 
tion to  the  6th  grade  land  and  no  rent  will  be  paid 
for  the  6th  grade  land.  The  E  grade  farmer  is 
able  to  secure  a  return  of  six  dollars  on  the  mar- 
ginal land.  It  cannot  be  expected,  therefore,  that 

174 


DISTRIBUTION    OF    WEALTH 

he  will  be  willing  to  take  less  on  any  other  grade. 
He  can  pay  one  dollar  and  twenty  cents  for  the 
amount  of  5th  grade  land  on  which  the  same  out- 
lay is  made  as  on  the  acre  of  the  F  grade  land, 
and  retain  a  net  return  equal  the  gross  return  on 
the  no-rent  land.  But  the  F  grade  farmer  can 
bid  no  more  than  one  dollar  for  the  use  of  this 
land,  and  so  far  as  he  is  concerned,  the  E  grade 
farmer  can  have  the  5th  grade  land  for  anything 
over  one  dollar,  and  to  give  a  small  balance  let 
us  say  he  will  offer  one  dollar  and  five  cents. 

If  the  E  grade  farmer  can  secure  the  use  of  5th 
grade  land  for  one  dollar  and  five  cents  per  unit 
(thinking  of  the  amount  of  land  on  which  the 
given  amount  of  labor  and  capital  is  expended  on 
the  various  grades  of  land  as  a  unit  of  land  power) 
leaving  him  a  net  return  of  six  dollars  and  fifteen 
cents,  he  will  certainly  not  take  less  on  4th  grade 
land.  He  will  cease  to  bid  for  the  4th  grade 
land,  therefore,  when  the  rent  rises  above  two  dol- 
lars and  twenty-five  cents.  When  the  rent  of  5th 
grade  land  is  one  dollar  and  five  cents  the  D  grade 
farmer  could  secure  a  net  return  of  seven  dollars 
and  thirty-five  cents  on  that  grade  of  land,  and 
he  could  as  well  pay  two  dollars  and  forty-five 
cents  for  4th  grade  land,  for  this  would  leave  him 
the  same  net  return  as  he  could  win  on  5th  grade 
land,  but  so  far  as  the  competition  of  his  inferiors 
is  concerned  any  amount  over  two  dollars  and 
twenty-five  cents,  let  us  say  two  dollars  and  thirty 

175 


AGRICULTURAL    ECONOMICS 

cents  is  all  he  need  pay,  and  this  will  leave  him  a 
net  return  of  seven  dollars  and  fifty  cents  which 
is  fifteen  cents  better  than  he  could  do  on  the  5th 
grade  land.  To  secure  the  same  net  return  on 
3d  grade  land,  the  D  grade  farmer  cannot  bid 
over  three  dollars  and  seventy  cents  for  its  use. 
But  the  C  grade  farmer  whose  net  return  on  4th 
grade  land,  at  a  rent  of  two  dollars  and  thirty 
cents,  would  be  eight  dollars  and  ninety  cents,  can 
secure  the  same  net  return  from  3d  grade  land 
after  paying  three  dollars  and  ninety  cents  rent 
for  its  use,  so  that  it  will  be  profitable  for  him  to 
outbid  the  D  grade  farmer  for  3d  grade  land  by 
offering  three  dollars  and  seventy-five  cents. 
This  leaves  the  C  grade  farmer  a  net  return  of 
nine  dollars  and  five  cents,  and  to  secure  the  same 
net  return  from  2d  grade  land  he  can  pay  no  more 
than  five  dollars  and  thirty-five  cents  as  rent  for 
2d  grade  land.  But  the  B  grade  farmer  can  as 
well  afford  to  pay  five  dollars  and  fifty-five  cents 
for  2d  grade  as  to  pay  three  dollars  and  seventy- 
five  cents  for  3d  grade,  and  we  may  assume,  there- 
fore, that  he  will  outbid  the  C  grade  farmer  by 
offering  five  dollars  and  forty  cents  for  the  use  of 
the  2d  grade  land.  This  would  leave  the  B  grade 
a  net  return  of  ten  dollars  and  eighty  cents.  He 
could  pay  seven  dollars  and  twenty  cents  for  ist 
grade  land,  and  secure  the  same  net  return;  but 
the  A  grade  farmer  could  pay  anything,  less  than 
seven  dollars  and  forty  cents,  rather  than  use  any 

176 


DISTRIBUTION    OF    WEALTH 

of  the  less  productive  grades  of  land  at  the  rents 
which  any  of  the  other  grades  of  farmers  could 
afford  to  pay  for  those  grades  of  land.  It  may 
be  assumed,  therefore,  that  he  would  pay  seven 
dollars  and  twenty-five  cents  for  the  ist  grade 
land. 

With  the  competitive  rents  determined  in  this 
way  the  A  grade  farmer  can  secure  a  larger  net 
return,  and  therefore  a  larger  net  profit,  on  ist 
grade  land  than  on  land  of  any  other  grade. 
This  is  true  also  of  the  B  grade  farmer  on  the 
2d  grade  land,  and  so  it  continues  to  be  true  for 
the  succeeding  grades  of  farmers  on  the  corre- 
sponding grades  of  land.  The  A  grade  farmer's 
net  return  would  be  twelve  dollars  and  seventy-five 
cents,  but  from  this  must  be  deducted  the  neces- 
sary return  to  capital-goods.  The  remainder,  in 
case  all  the  labor  is  performed  by  him  and  his 
family,  is  the  net  profit.  Now  since  the  capital 
is  usually  owned  by  the  farmer,  it  is  the  net  return 
minus  the  maintenance  of  the  capital-goods  and 
the  farmer's  cost  of  living,  which  shows  the 
capacity  of  the  farmer  to  save  from  his  earnings. 

These  figures  are  intended  only  as  an  illustra- 
tion, but  as  an  illustration  they  may  enable  the 
student  to  comprehend  the  complex  character  of 
the  forces  which  are  operating  to  determine  the 
amount  of  rent  which  must  be  paid  for  a  given 
piece  of  land  at  a  given  time,  also  how  it  is  that 
some  farmers  can  pay  high  rents  and  at  the  same 

12  177 


AGRICULTURAL    ECONOMICS 

time  make  large  profits;  and,  finally,  it  is  hoped 
that  by  this  time  it  has  become  quite  clear  that  it 
is  to  the  interest  of  each  farmer  to  select  that 
grade  of  land  which  corresponds  to  his  degree  of 
qualitative  efficiency. 

In  this  illustration  we  have  considered  compe- 
tition in  but  one  kind  of  agriculture.  The  more 
efficient  farmer  in  one  branch  of  agriculture  may 
be  the  less  efficient  in  another.  The  best  shep- 
herd may  be  a  poor  market  gardener  and  vice 
versa.  The  shepherd  \vill  be  able  to  win  his  larg- 
est net  profit  on  cheap  land,  wrhile  the  market 
gardener  can  do  best  on  expensive  lands  near  the 
great  cities.  Yet  the  general  principle  holds  that 
the  best  shepherd  can  win  the  largest  net  profit 
on  the  best  sheep  land,  and  the  best  market 
gardener  on  the  land  best  suited  to  his  particular 
line  of  production. 

There  is  also  a  differential  paid  for  the  use  of 
the  more  productive  forms  of  capital-goods. 
This  is  usually  hidden  behind  the  fact  that  the 
return  to  capital-goods  is  usually  thought  of  in 
terms  of  a  rate  per  cent,  upon  the  capital  value  of 
the  capital-goods.  It  might  be  satisfactory  to 
think  of  the  returns  to  capital  goods  in  this  way 
were  it  true  that  the  valuations  of  the  different 
grades  of  capital-goods  varied  exactly  as  the  pro- 
ductivity of  these  capital-goods;  but,  because  of 
the  variations  in  the  qualitative  efficiency  of  the 
farmers,  the  variations  in  the  values  of  these  goods 
178 


DISTRIBUTION    OF    WEALTH 

do  not  correspond  to  the  variations  in  their  pro- 
ductivity. In  just  the  same  way  as  in  the  case  of 
land,  the  qualitatively  more  efficient  farmers  are 
in  a  position  to  pay  more  for  the  more  productive 
grades  of  capital-goods  than  the  qualitatively  inef- 
ficient can  afford,  to  pay;  and  the  value  of  the 
capital-goods,  as  is  the  case  in  the  value  of  land, 
tends  to  vary  with  the  amount  which  is  paid  for 
its  use. 

This  may  be  illustrated  by  Fig.  6,  by  simply 
replacing  the  term  land  by  the  term  capital-goods. 
In  fact  it  seems  clear  that,  in  considering  the  situ- 
ation at  a  given  time,  land  and  capital-goods 
might  well  be  considered  together  in  the  illustra- 
tion given  in  Fig.  6  when  it  is  the  farmer's  sur- 
plus due  to  superior  efficiency  that  is  under  con- 
sideration. It  seems  that  the  land  and  capital- 
goods  employed  in  agricultural  production,  are 
alike  in  that  a  differential  is  paid  for  the  better 
grades,  and  that  the  qualitatively  more  efficient 
farmers  can  well  afford  to  pay  more  for  the  use 
of  these  better  grades  of  the  material  instruments 
of  production  than  the  qualitatively  less  efficient 
farmers.  Indeed,  it  would  seem  that  this  princi- 
ple may  be  applied  quite  generally,  and  that  it 
explains  why  the  more  efficient  men  in  all  lines  of 
economic  activity  are  able  to  outbid  the  less  effi- 
cient for  the  better  facilities  for  production. 

With  perfect  competition  the  differential  rent 
of  any  grade  of  land  or  of  any  grade  of  capital- 

179 


AGRICULTURAL    ECONOMICS 

goods  will  be  measured  by  the  differential  surplus 
which  the  marginal  farmer  could  produce  upon 
such  land,  by  employing  such  capital-goods,  plus 
the  further  differentials  arising  from  differences 
in  the  efficiency  of  the  farmers. 

Variation  in  productivity  is,  to  be  sure,  the 
primary  occasion  of  differential  rents,  and  if  all 
farmers  possessed  the  same  degree  of  qualitative 
efficiency,  the  differential  surplus  would  repre- 
sent the  differential  rent,  being  the  additional 
amount  which  all  farmers  would  as  willingly  pay 
for  the  better  land  and  the  better  grades  of  capital- 
goods  as  consent  to  using  the  less  productive 
grades  of  these  material  agents  of  production. 
But  because  of  the  differences  in  the  efficiency  of 
farmers,  the  amount  of  differential  surplus  which 
a  given  piece  of  land  or  a  given  horse  or  machine 
will  yield  is  not  a  definite  amount,  but  varies  with 
the  qualitative  efficiency  of  the  farmers ;  and  com- 
petition determines  what  share  of  the  surplus, 
which  a  given  farmer  can  produce,  will  actually 
be  paid  as  differential  rent.  The  differential  rent 
of  the  better  grades  of  the  material  instruments 
of  production  will  be  greater  than  the  differen- 
tial surplus  which  the  marginal  farmer  could  pro- 
duce by  using  them,  but  it  will  be  less  than  the 
surplus  which  the  most  efficient  farmer  can 
produce. 

Fig.  7  is  intended  to  illustrate  the  distribution 
of  the  gross  returns  of  the  agricultural  industry, 

180 


DISTRIBUTION    OF    WEALTH 

among  the  factors  of  production.  This  illustra- 
tion is  a  modification  of  Fig.  6,  and  it  is  assumed 
that  the  factors  will  be  brought  together  in  the 
most  productive  manner,  that  is,  with  the  quali- 
tatively most  efficient  farmers  operating  the  most 
productive  forms  of  capital-goods  upon  the  most 
productive  land  and  that  these  factors  are  associ- 
ated in  the  proper  proportion.  Under  these  con- 
ditions the  composite  units  which  are  made  up  of 
the  most  productive  grades  of  the  factors,  will 
yield  a  relatively  larger  product,  in  proportion  to 
their  productivity  even,  than  the  units  made  up  of 
the  less  productive  grades  of  the  factors,  and 
hence,  in  the  higher  grades  each  factor  will  receive 
the  necessary  minimum  and  a  further  differential 
due  to  superior  productivity  and  to  the  coopera- 
tion of  the  more  productive  grades  of  the  factors. 
When  the  subject  of  distribution  is  viewed 
from  the  standpoint  of  industrial  progress, 
through  a  long  period  of  years,  the  most  impor- 
tant fact  to  be  considered  is  that  the  other  fac- 
tors usually  increase  more  rapidly  than  does  land. 
As  the  farmers  and  the  capital-goods  continue  to 
increase  more  rapidly  than  the  land,  some  of  the 
better  grades  of  these  more  rapidly  increasing 
factors  are  crowded  down  farther  and  farther 
upon  the  less  and  less  productive  land.  This  nec- 
essarily results  in  the  driving  out  of  business  of 
some  of  the  lower  grades  of  the  farmers  and  the 
capital-goods,  leaving  upon  the  margin  higher 

181 


AGRICULTURAL    ECONOMICS 

grades  of  these  factors  which  will  be  able  to  earn 
their  necessary  minimum  upon  lower  grades  of 
land,  and  hence  the  margin  of  cultivation  will  be 


FIG.  7 

driven  down  to  less  productive  land  by  the  com- 
petition of  the  increasing  numbers  of  farmers  and 
the  increasing  quantities  of  capital-goods.  The 
resulting  change  in  the  distribution  of  the  gross 
product  among  the  factors,  is  illustrated  by  the 
dotted  line  in  Fig.  7,  where  it  will  be  noted  that 
the  rent  rises  as  a  result  of  a  fall  in  the  returns  to 
the  other  factors  of  production. 

It  is  possible  for  the  rent  to  rise,  however,  with- 
out any  absolute  decline  in  the  returns  to  the 
other  factors.     Changes  in  the  prices  of  agricul- 
182 


DISTRIBUTION    OF    WEALTH 

tural  products  will  greatly  influence  the  share 
which  will  be  accounted  to  land.  When,  as  a 
result  of  increased  demand  for  food  and  clothing, 
the  prices  of  agricultural  products  rise,  the  share 
of  the  returns  of  a  given  farm  which  may  be 
credited  to  land,  increases.  When,  for  any  reason, 
such  as  the  opening  up  of  vast  areas  of  very  pro- 
ductive land,  the  prices  of  agricultural  products 
fall,  the  share  of  the  gross  returns  which  can  be 
paid  for  the  use  of  land  will,  other  things  remain- 
ing the  same,  necessarily  fall. 

The  laws  of  value  and  price  hold  true  with 
respect  to  the  price  which  is  paid  for  the  use  of 
land  and  capital-goods ;  but  as  we  have  seen,  the 
conditions  as  to  supply  and  demand  are  very  com- 
plex, and  the  difficult  problems  in  distribution 
arise  out  of  the  fact  that  costs  and  prices  do  not 
correspond  except  on  the  margin  where  the  least 
productive  of  all  of  the  factors  are  brought  to- 
gether, and  that  there  are  large  surpluses  over 
costs,  to  be  divided.  It  was  one  time  thought  that 
all  of  this  surplus  should  be  attributed  to  land; 
but  in  recent  years  economists  have  come  to  see 
that  each  of  the  factors  is  in  a  position  to  com- 
mand a  share  of  the  surplus,  that  the  share  se- 
cured by  each  is  worked  out  through  supply  and 
demand,  and  that  the  most  slowly  increasing 
factor  tends  to  receive  a  larger  and  larger  pro- 
portion of  the  surplus. 


183 


AGRICULTURAL    ECONOMICS 

LITERATURE 

David  Ricardo,  Principles  of  Political  Economy  and  Tax- 
ation, Chapter  II. 

T.  N.  Carver,  The  Distribution  of  Wealth. 

J.  B.  Clark,  The  Distribution  of  Wealth. 

J.  R.  Commons,  The  Distribution  of  Wealth. 

J.  A.  Hobson,  The  Economics  of  Distribution. 

C.  B.  Spahr,  The  Present  Distribution  of  Wealth  in  the 
United  States. 


184 


CHAPTER  X 

THE  PRINCIPLES  TO  BE  FOLLOWED  IN  ESTI- 
MATING THE  VALUE  OF  FARM  LAND  AND 
EQUIPMENTS. 

It  is  easy  to  say  that  the  price  of  land,  like  the 
price  of  any  other  economic  good,  is  determined 
by  the  forces  and  conditions  which  regulate  the 
demand  and  the  supply ;  but  this  is  too  general  to 
be  of  any  help  to  the  farmer  who  is  trying  to  esti- 
mate the  value  of  a  particular  piece  of  land. 

The  net  rent,  or  the  share  of  the  gross  returns 
which,  under  conditions  of  free  competition,  is 
credited  to  land,  above  what  is  necessary  to  keep 
the  land  intact,  is  the  starting  point  for  figuring 
the  value  of  a  piece  of  land.  When  one  invests  in 
land,  the  thing  for  which  he  really  pays  is  the  per- 
petual right  to  use  the  land  and  to  be  free  from  the 
payment  of  rent,  or  to  receive  the  income  which 
the  land  will  yield  if  leased  to  someone  else. 

The  essential  difference  between  the  buying  of 
a  piece  of  land  and  the  buying  of  a  perpetual  an- 
nuity bond  lies  in  the  fact  that  while  the  income 
from  the  latter  is  fixed  in  terms  of  a  money 
income,  the  former  may  rise  or  fall  as  a  result  of 
changes  in  the  conditions  of  competition  for  the 

185 


AGRICULTURAL    ECONOMICS 

use  of  land,  or  from  changes  in  the  value  of  the 
unit  of  the  standard  of  value. 

Let  it  be  assumed  that  the  net  rent  of  a  given 
piece  of  land  is  three  dollars.  On  the  further  as- 
sumption that  this  amount  will  not  change,  we  may 
think  of  this  acre  of  land  as  a  perpetual  bearer 
of  an  annual  income  of  three  dollars.  Three 
dollars  this  year,  three  dollars  next  year,  and  the 
next,  and  so  on  so  long  as  time  shall  last.  The 
total  amount  of  rent  which  may  be  received  from 
this  land  is  incalculable.  If  there  is  no  limit  to 
the  number  of  years  during  which  rent  may  be 
received  for  the  use  of  this  land,  then  the  amount 
of  rent  to  be  received  may  become  infinitely  great, 
and  if  one  were  required  to  pay  down  the  full 
amount  of  all  these  possible  rents,  which  the 
future  years  may  possibly  yield,  the  price  of  land 
would  be  such  that  no  man  could  purchase  it. 

As  a  matter  of  fact,  however,  the  present  mar- 
ket value  of  the  perpetual  rent  bearer  is  often  not 
more  than  twenty  times  the  net  rent,  and  it  is 
seldom  more  than  thirty  times  the  rent.  This  is 
explained  by  the  fact  that  present  wants  are  esti- 
mated more  highly  than  future  wants,  which  leads 
to  the  discounting  of  future  incomes1  "at  a  rate 
that  reflects  the  prevailing  premium  on  the  pres- 
ent." The  rent  which  will  be  due  one  year  from 

1  Frank  A.  Fetter,  Publications  of  the  Am.  Econ.  Assn., 
Papers  and  Proceedings  of  the  Sixteenth  Annual  Meeting, 
Part  I.,  p.  196. 

186 


VALUE    OF    FARM    LAND 

date  is  discounted  at  this  prevailing  rate,  and  so 
it  is  for  all  the  succeeding  rents.  The  present 
values  of  the  succeeding  future  rents  grow  smaller 
and  smaller  as  the  time  one  must  wait  for  them 
becomes  greater  and  greater,  until  finally  the  rent 
which  is  due  at  the  end  of  an  infinite  period  of 
time  would  be  infinitesimal. 

When  the  rate  of  discount  is  five  per  cent.,  for 
example,  the  present  valuation  of  a  three  dollar 
rent  which  will  be  due  in  ten  years  is  approxi- 
mately one  dollar  and  eighty- four  cents ;  the  three 
dollar  rent  which  is  due  after  twenty  years  has  a 
present  valuation  of  about  one  dollar  and  twelve 
cents;  and  the  three  dollar  rent  which  is  due  in 
forty  years  has  a  present  value  of  about  forty-two 
cents.  If  this  process  of  discounting  future  rents 
be  carried  far  enough  the  point  would  finally  be 
reached  where  the  present  value  of  the  future  rent 
is  too  small  to  be  taken  into  account.  The  pres- 
ent value  of  the  rent  which  is  due  after  an  infinite 
number  of  years  is  infinitesimal.  If  the  pres- 
ent values  of  all  these  future  rents  be  added  to- 
gether the  sum  would  be  the  present  capital  value 
of  the  land,  or  the  amount  of  capital  which,  if 
lent  at  a  rate  of  five  per  cent,  per  annum  would 
yield  the  same  income  as  the  land  is  yielding  at 
the  present  time. 

The  simple  mathematical  method  of  finding 
this  "sum"  is  to  divide  the  annual  value,  that  is 
the  net  rent,  by  the  rate  which  "reflects  the  pre- 

187 


AGRICULTURAL    ECONOMICS 

vailing  premium  on  the  present."  If  the  net  an- 
nual income  derived  from  a  piece  of  land  is  three 
dollars  per  acre  and  the  rate  of  discount  is  five  per 
cent.,  the  present  capital  value  of  the  land  would 
be  sixty  dollars  per  acre.  Sixty  dollars,  is,  then, 
the  amount  of  money  which,  if  lent  at  five  per 
cent,  would  yield  an  annual  income  of  three  dol- 
lars. This  is  usually  spoken  of  as  the  capital 
value  of  the  land. 

That  this  simple  method  of  dividing  the  three 
dollar  net  rent  by  the  prevailing  rate  of  discount 
to  find  the  capital  value  of  a  piece  of  land  is 
equivalent  to  finding  the  sum  of  an  infinite  series 
of  prospective  net  annual  three  dollar  rents  dis- 
counted at  the  same  rate  may  be  demonstrated  as 
follows : 

The  present  value  of  a  dollars  due  in  t  years 
if  the  interest  be  compounded  annually  at  the 

rate  of  r  would  be  /  \  \t  since  X  dollars  com- 
pounded at  rate  r  would  give  X  (i-\-r)*, 
and  if  X  (i+r)'  =a  then  X=  plTy-  If  then 
the  net  income  of  a  farm  be  a  dollars  a 
year  its  value  would  be  expressed  by  the 

equation:     F=  -^  + 
.        >4+  ad  inf.      This  is   an   infinite    "geo- 
metrical" progression  with  first  term  — ~r —  and 

188 


VALUE    OF    FARM    LAND 
ratio  — ; — .     The  limit  of  the  sum  of  such  a 


series  is which  reduces  to  — .    We  have 


i  — 


i+r 


then  the  formula  for  the  value:    V  =  —  which 

is  the  ordinary  method  of  capitalizing  rent.1 

As  a  matter  of  fact,  however,  the  present  capital 
value  of  the  land  as  determined  in  this  way  does 
not  often  correspond  with  the  price  which  is  paid 
for  land.  There  are  several  important  reasons 
for  this  difference.  First  it  is  not  certain  that  the 
annual  income  that  can  be  drawn  from  sixty  dol- 
lars will  always  be  three  dollars.  The  rate  of 
interest  may  fall  to  four  per  cent,  which  would 
reduce  the  income  to  be  derived  from  that  amount 
of  money  to  two  dollars  and  forty  cents,  while 
the  annual  income  from  the  land  would  not  be 
reduced  by  a  lowering  of  the  current  rate  of 
interest.  The  belief  that  there  is  a  greater  proba- 
bility of  a  decline  in  the  income  to  be  derived 
from  the  money  than  from  the  land,  often  makes 
men  willing  to  pay  more  for  land  than  the  amount 
of  capital  which  will  now  yield  the  same  income. 
Another  reason  which  leads  men  to  pay  more 
for  land  than  a  money  loan  which  will,  at  the  pres- 

1The  author  is  indebted  to  Prof.  E.  B.  Skinner,  of  the 
Department  of  Mathematics  of  the  University  of  Wisconsin, 
for  assistance  in  the  preparation  of  this  formula. 

189 


AGRICULTURAL    ECONOMICS 

ent  time,  yield  the  same  income,  is  the  belief  that 
with  the  progress  of  society  the  competition  for 
the  use  of  land  will  result  in  a  rise  in  rents,  that, 
while  there  is  a  tendency  for  the  annual  income 
which  can  be  derived  by  lending  a  given  amount 
of  money  to  decline,  there  is  at  the  same  time  and 
under  like  conditions  a  tendency  for  the  income  of 
a  given  amount  of  land  to  increase. 

The  available  land  supply  of  a  country  usually 
increases  less  rapidly  than  the  population,  so  that 
it  becomes  necessary  to  resort  to  land  which  is 
either  less  fertile,  less  favorably  situated,  or  more 
difficult  to  bring  under  cultivation ;  and  as  a  result 
of  keener  competition  for  the  better  grades  of  land 
the  amount  which  will  be  offered  for  the  use  of 
such  land  will  rise.  While  this  is  what  usually 
happens  in  the  long  run,  it  sometimes  happens  that 
the  discovery  of  great  quantities  of  very  fertile 
land,  and  the  invention  of  better  means  of  trans- 
portation making  this  new  land  more  accessible, 
will  for  a  time  reduce  the  competition  for  the 
land  which  was  already  under  cultivation,  and  the 
rent  of  such  land  may,  for  a  time,  be  reduced; 
but  it  is  believed  that  the  occasional  reactions  of 
this  kind  cannot  permanently  counteract  the  tend- 
ency for  the  price  of  land  to  rise. 

The  land  which  yields  the  highest  rent  at  one 
time  may  be  surpassed  in  the  amount  of  rent 
which  it  will  yield  at  another  time,  by  land  which 
was  formerly  let  for  a  smaller  rent.  This  may  be 

190 


VALUE    OF    FARM    LAND 

the  result  (i)  of  the  introduction  of  a  new  crop 
which  thrives  best  on  the  land  which  for  other 
purposes  was  counted  inferior;  (2)  it  may  be  the 
result  of  a  dense  population  in  a  region  which  had 
formerly  been  sparsely  populated ;  in  other  words, 
the  development  of  a  better  home  market;  (3)  it 
may  be  the  result  of  an  improvement  in  the  means 
of  communication  which  makes  the  land  which 
was  formerly  more  fertile  but  less  accessible, 
equally  accessible,  and  hence,  more  valuable;  or 
(4)  it  may  be  the  result  of  a  rise  in  the  prices  of 
agricultural  produce,  or  a  fall  in  the  current  rate 
of  interest,  either  of  which  would  result  in  a  more 
rapid  increase  in  the  value  of  land  which  is  more 
fertile  and  accessible,  but  which  requires  relatively 
larger  expenditures  to  bring  it  into  cultivation, 
than  in  the  value  of  land  which  is  less  fertile  or 
accessible  but  much  more  easily  brought  into  culti- 
vation. All  of  these  possible  variations  in  the 
annual  value  of  land  must  be  properly  anticipated 
and  included  in  the  list  of  future  incomes  which 
are  discounted  to  find  their  present  values. 

Perhaps  enough  has  been  said  to  impress  the 
thoughtful  reader  with  the  fact,  that  to  determine 
the  value  of  a  piece  of  land  is  by  no  means  a 
simple  matter.  When  a  man  sells  a  piece  of  land 
he  transfers  his  right  to  a  series  of  annual  incomes 
which  may  be  greater  or  less  as  time  passes  by, 
but  which  will  probably  increase  as  the  years  go 
by.  In  payment  for  this  land  he  is  to  accept 
191 


AGRICULTURAL    ECONOMICS 

another  income-bearer  which  may  yield  a  larger 
or  smaller  annual  income  as  the  years  go  by,  but 
which  will  probably  yield  a  smaller  income  in  the 
future  than  at  present.  This  circumstance  makes 
it  impossible  to  do  more  than  approximate  the 
actual  present  value  of  a  piece  of  land. 

The  presence  of  so  many  uncertainties  makes 
the  buying  of  land  partake  more  or  less  of  the 
character  of  speculation,  and  during  times  of  pros- 
perity the  tendency  is  for  men  to  be  optimistic  and 
over-estimate  the  probabilities  of  a  rise  in  rents  or 
a  fall  in  the  rate  of  interest.  On  the  other  hand, 
when  periods  of  depression  come,  the  tendency  is 
for  men  to  underestimate  the  future  possibilities. 
As  a  result  of  this  psychological  element,  the  tend- 
ency is  for  the  price  of  land  to  rise  too  high  dur- 
ing periods  of  prosperity  and  to  sink  too  low  dur- 
ing periods  of  depression.  As  many  years  are 
usually  required  for  one  of  these  changes  from 
undervaluation  to  overvaluation  to  take  place, 
land  does  not  lend  itself  so  readily  to  speculation 
as  does  wheat,  for  example ;  and  yet  the  man  with 
plenty  of  funds  which  are  available  at  the  right 
time  may  win  large  profits  from  speculations  in 
land.  Speculation  if  indulged  in  at  the  proper 
time  may  keep  the  price  of  land  from  falling  so 
low  as  it  might  otherwise  do  in  times  of  depres- 
sion, and  also  from  rising  so  high  as  it  otherwise 
might  during  times  of  inflated  values.  This  is 
true  only  where  the  speculator  is  wise  enough  to 

192 


VALUE    OF    FARM    LAND 

buy  when  prices  are  too  low  and  to  sell  when  the 
values  rise  too  high.  Unwise  speculation  in  land 
may  have  the  very  opposite  result. 

The  study  of  the  rise  and  fall  of  the  price  of 
land  in  the  United  States  seems  to  show  that  there 
are  times  when  the  price  rises  rapidly  for  a  few 
years  and  then  remains  stationary  for  several 
years.  This  latter  period  is  usually  character- 
ized by  the  fact  that  sales  of  land  are  relatively 
few.  Land  is  generally  held  at  the  prices  which 
were  reached  during  the  period  of  rapid  sales 
when  optimistic  views  of  the  future  forced  the 
price  considerably  beyond  the  present  capital 
value.  If  sales  are  made  during  this  dull  period 
they  are  likely  to  be  at  a  price  appreciably  lower 
than  that  at  which  land  is  usually  held,  and  likely 
to  be  a  forced  sale.  The  price  of  land,  then,  may 
be  illustrated  by  a  curve  which  rises  during  one 
period,  remains  on  the  same  level  or  falls  during  a 
succeeding  period,  and  then  rises  again.  When 
viewed  for  a  long  period  of  time,  the  general  rise 
in  land  values  is  evident,  but  the  temporary  fluc- 
tuations are  very  important  to  any  one  interested 
in  buying  land. 

The  price  of  land  in  any  given  district  is  influ- 
enced by  the  number  and  character  of  the  men  who 
desire  to  be  farmers  in  that  district.  It  often  hap- 
pens that  competition  for  the  use  of  land  is  keener 
in  some  regions  than  in  others,  even  though  the 
land  be  as  fertile,  and  the  prices  of  agricultural 
13  i93 


AGRICULTURAL    ECONOMICS 

products  as  high  in  the  one  place  as  in  the  other. 
Some  districts  produce  more  high  grade  farmers 
each  generation  than  do  other  districts,  and  as  a 
strong  motive  is  required  to  impel  the  surplus  of 
farmers  to  remove  to  another  district,  competition 
in  the  over-populated  district  forces  the  rents  and 
the  prices  which  are  paid  for  land  higher  and 
higher  until  they  are  appreciably  above  the  level 
of  those  which  are  paid  for  land  in  other  districts 
which  are  capable  of  producing  crops  which  are 
just  as  valuable  in  terms  of  money. 

Again,  it  sometimes  happens  that  land  is  val- 
ued for  the  social  standing  which  accompanies  its 
ownership,  as  well  as  for  the  income  in  money 
which  it  yields.  In  a  country  where  this  is  true, 
and  where,  at  the  same  time,  there  are  large  num- 
bers of  persons  who  have  great  fortunes  and  who 
are  very  desirous  of  attaining  to  a  high  social 
position,  the  prices  which  may  be  paid  for  land 
often  rise  far  beyond  what  could  be  paid  if  the 
series  of  annual  incomes  in  cash  were  the  only 
factor  to  be  taken  into  account. 

Of  two  pieces  of  land  which  will  rent  for  the 
same  amount,  that  in  one  district  may  sell  for  a 
higher  price  than  that  in  another  because  there  is 
more  money  seeking  investment  in  the  one  place 
than  in  the  other.  A  man  of  wealth  will  usually 
rather  have  his  capital  invested  in  land  near  where 
he  lives  than  at  a  great  distance  where  he  cannot 
so  readily  look  after  his  property,  or  if  he  invests 
194 


VALUE    OF    FARM    LAND 

in  land  at  a  greater  distance  he  will  usually  expect 
a  higher  rate  of  return  to  counteract  the  disad- 
vantages arising  from  the  distance. 

This  same  principle  of  capitalization  may  be 
applied  to  other  forms  of  income  bearers  as  well 
as  to  land.  In  estimating  the  value  of  a  given 
machine,  the  farmer  may  think  of  the  amount  of 
service  he  is  to  get  out  of  the  machine  during  the 
next  ten  years,  let  us  say,  on  the  assumption  that 
the  machine  will  be  worn  out  in  that  time.  This 
is  a  rather  difficult  process  because  the  deteriora- 
tion of  the  machine  and  perhaps,  also,  the  inven- 
tion of  a  better  machine  to  do  the  same  work  will 
result  in  a  gradual  reduction  in  the  usefulness  of 
the  machine;  and  yet,  if  he  is  to  invest  wisely  in 
the  various  forms  of  capital-goods,  the  farmer 
should  attempt  to  estimate  the  value  of  the  series  of 
uses  which  may  reasonably  be  expected  to  be  got- 
ten from  the  particular  instrument  of  production 
during  the  time  which  it  shall  be  at  all  serviceable, 
and  then  find  the  present  value  of  these  future 
uses  by  discounting  them  "at  a  rate  that  reflects 
the  prevailing  premium  on  the  present." 

This  capital  value  of  the  instrument  represents 
the  maximum  price  which  the  farmer  can  afford  to 
pay,  but  does  not,  of  course,  necessarily  represent 
the  market  price  of  the  instrument  of  production. 
The  market  price  may  be  greater  or  less  than  the 
capital  value  obtained  in  this  way,  for  the  instru- 
ment of  production  may  have  as  many  valuations 


AGRICULTURAL    ECONOMICS 

as  there  are  different  grades  of  farmers  to  use  it 
and  different  grades  of  uses  to  which  it  may  be 
put  by  a  given  farmer.  In  order  to  get  a  capital 
value  that  will  correspond  more  or  less  closely  to 
the  market  value  of  the  various  forms  of  capital- 
goods  it  will  be  necessary,  therefore,  to  arrive  at 
the  competitive  price  which  will  be  paid  for  the 
use  of  a  given  capital-good  during  the  series  of 
years  of  its  usefulness,  and  then  find  the  present 
value  of  the  series  of  incomes,  in  the  same  way  as 
has  been  done  in  the  case  of  land.  But  since  it 
is  not  common  in  this  country  to  let  horses,  tools 
and  machinery  to  farmers  for  a  hire,  this  method 
of  capitalization  is  less  practical  to  the  farmer 
when  applied  to  capital-goods  than  when  applied 
to  land. 

The  cost  of  producing  the  machine  or  the  horse 
is  an  important  element  in  determining  the  price 
which  must  be  paid  for  it  in  order  that  it  may  be 
produced.  On  the  other  hand,  the  usefulness  of 
the  machine  or  the  horse  to  the  farmer  forms  the 
basis  for  his  estimating  whether  or  not  he  can 
better  afford  to  pay  the  market  price  or  do  with- 
out them.  It  may  be  true  even  that  the  capital 
value  of  the  instrument,  when  calculated  on  the 
basis  of  its  usefulness  to  a  given  farmer,  may  be 
greater  than  its  market  value  and  yet  it  might  be 
unprofitable  for  the  farmer  to  buy  the  particular 
horse  or  machine,  because  other  means  of  securing 
the  same  end  might  prove  more  profitable. 

196 


VALUE    OF    FARM    LAND 

The  theory  of  capitalization  is  especially  use- 
ful in  the  consideration  of  the  value  of  farm  land 
because  the  value  of  a  given  piece  of  land  has  no 
particular  relation  to  the  cost  of  bringing  such 
land  under  cultivation.  The  income  received  by 
the  landlord  is  largely  a  surplus  which  is  credited 
to  land  because  it  is  scarce,  rather  than  because 
it  costs  any  definite  amount  to  improve  the  land. 
Land  is  also  much  more  permanent  in  character 
than  are  capital-goods,  and  for  this  reason,  also,  it 
lends  itself  with  more  facility  to  the  above  method 
of  capitalization. 

These  a-re  some  of  the  most  important  principles 
and  conditions  which  should  be  kept  in  mind  in 
the  consideration  of  the  values  of  farm  land,  and 
of  farm  live  stock  and  equipment.  The  prospec- 
tive buyer  of  land  will  do  well  to  bear  in  mind  the 
advice  of  Cato,  a  Roman  agricultural  writer,  who 
is  quoted  by  Pliny1  as  saying,  "Do  not  be  too 
eager  in  buying  a  farm.  In  rural  operations 
never  be  sparing  of  your  trouble,  and,  above  all, 
when  you  are  purchasing  land. — A  bad  bargain 
is  always  a  ground  for  repentance." 

LITERATURE 
Frank  A.  Fetter",  The  Principles  of  Economics,  Chapter  15. 

1  Pliny's  Natural  History,  Book  XVIII,  Chapter  6 ;  "Bohn's 
Library"  edition,  Vol.  IV,  p.  n. 


197 


CHAPTER  XI 

THE   FARMER'S   MEANS   OF  ACQUIRING  LAND. 

Section  I.  Free  land. — Hitherto  the  progress 
of  American  agriculture  has  been  powerfully  in- 
fluenced by  the  presence  of  vast  areas  of  govern- 
ment lands  which  were  easily  secured,  easily 
brought  into  cultivation,  and  which  gave  large 
returns  upon  investments.  The  presence  of  these 
vast  areas  of  cheap  land  of  great  fertility  in  a 
country  where  labor  was  scarce  led  to  the  inven- 
tion of  many  labor  saving  devices  until  America 
became  noted  the  world  over  for  her  agricultural 
machinery;  but,  above  all,  the  presence  of  free 
land  has  made  the  oppressions  of  landlords  im- 
possible. The  farmers  have  been  able  to  take  up 
valuable  government  lands.  This  means  of 
acquiring  land  ownership  has  been  very  impor- 
tant from  the  time  the  first  settlers  landed  in  the 
New  World  until  the  present  time.  When,  in  the 
earlier  days,  land  became  scarce  in  Massachusetts, 
emigration  to  Connecticut  set  in,  and  when  the 
best  lands  in  both  of  these  colonies  were  occupied, 
there  still  remained  unoccupied,  good  land  in  New 
York.  When  the  small  farmers  of  Virginia  were 


MEANS    OF    ACQUIRING    LAND 

crowded  out  by  the  great  planters,  they  found  un- 
occupied lands  in  North  Carolina,  and  later  they 
followed  Boone  into  the  wilderness  of  Kentucky. 
In  time  the  occupation  of  the  Mississippi  valley 
was  completed,  and  in  more  recent  years,  since  the 
great  plains  have  been  made  easily  accessible  by 
railways,  the  settlement  of  new  land  has  gone  on 
at  an  exceedingly  rapid  rate. 

That  the  acquisition  of  landownership  was  an 
easy  task  for  the  American  farmer  of  the  earlier 
days  is  indicated  by  the  following  quotation  taken 
from  a  description  of  the  settlements  along  the 
Monongahela  in  1772  and  1773  :  "Land  was  the 
object  which  invited  the  greater  number  of  these 
people  to  cross  the  mountains,  for  as  the  saying 
then  was,  'It  was  to  be  had  here  for  taking  up' ; 
that  is,  building  a  cabin  and  raising  a  crop  of 
grain,  however  small,  of  any  kind,  entitled  the 
occupant  to  four  hundred  acres  of  land,  and  a 
preemption  right  to  one  thousand  acres  more 
adjoining,  to  be  secured  by  a  land  office  warrant."1 

In  1790  Alexander  Hamilton  proposed  a  plan 
for  the  disposition  of  the  public  lands  which  reads 
as  follows :  "In  the  formation  of  a  plan  for  the 
disposition  of  the  vacant  lands  of  the  United 
States  there  appear  to  be  two  leading  objects  of 
consideration :  one,  the  facility  of  advantageous 
sales,  according  to  the  probable  course  of  pur- 

1  The  Settlement  of  the  Western  Country,  by  Reverend 
Joseph  Doddridge,  In  Hart's  American  History  Told  by  Con- 
temporaries, Vol.  II,  p.  387. 

199 


AGRICULTURAL    ECONOMICS 

chases;  the  other  the  accommodation  of  indi- 
viduals now  inhabiting  the  western  country,  or 
who  may  hereafter  emigrate  thither.  The  for- 
mer, as  an  operation  of  finance,  claims  primary 
attention;  the  latter  is  important,  as  it  relates  to 
the  satisfaction  of  the  inhabitants  of  the  western 
country.  It  is  desirable,  and  does  not  appear  im- 
practicable, to  conciliate  both.  Purchasers  may 
be  contemplated  in  three  classes :  moneyed  indi- 
viduals and  companies  who  will  buy  to  sell  again ; 
associations  of  persons  who  intend  to  make  set- 
tlements themselves;  single  persons  or  families, 
now  resident  in  the  western  country  or  who  may 
emigrate  thither  hereafter.  The  two  first  will  be 
frequently  blended,  and  will  always  want  consid- 
erable tracts.  The  last  will  generally  purchase 
small  quantities.  Hence  a  plan  for  the  sale  of 
the  western  lands,  while  it  may  have  due  regard 
for  the  last,  should  be  calculated  to  obtain  all  the 
advantages  which  may  be  derived  from  the  two 
first  classes."1 

The  government  was  slow  in  formulating  the 
plan  which  finally  became  most  significant  in  the 
conversion  of  the  public  domain  into  a  nation  of 
farms.  The  American  statesmen  of  the  Eight- 
eenth Century  looked  upon  the  western  lands  "as 
an  asset  to  be  cashed  at  once  for  payment  of  cur- 
rent expenses  of  government  and  extinguishment 

1  See  The  Public  Domain,  by  Donaldson,  p.  198. 
200 


MEANS    OF    ACQUIRING    LAND 

of  the  national  debt."1  This  desire  to  convert  the 
public  domain  into  cash  lecj  to  the  sale  of  land  in 
large  tracts.  Under  the  ordinance  of  May  20, 
1785,  surveyed  lands  were  offered  in  lots  as  large 
as  a  whole  township  of  32  sections  of  640  acres 
each,  for  not  less  than  $i  per  acre.2  Under  an 
Act  passed  May  18,  1796,  which  provided  for  the 
survey  of  certain  lands  in  the  present  state  of 
Ohio,  surveyed  lands  were  to  be  offered  at  public 
sale  in  sections  of  640  acres,  and  in  lots  of  eight 
such  sections  each.  The  minimum  price  was  then 
fixed  at  $2  per  acre.3  Prior  to  May  10,  1800, 
1,484,047  acres  of  land  had  been  sold  from  the 
public  domain  for  the  benefit  of  the  United  States. 
From  these  sales  was  realized  $1,201, 725. 68.4 

Under  an  Act  of  May  10,  1800,  land  offices 
were  opened  in  the  Northwest  Territory.  The 
minimum  price  was  kept  at  $2  per  acre.  Lands 
were  offered  for  three  weeks  at  public  sale  in  sec- 
tions and  half  sections,  and  what  remained  at  the 
end  of  this  period  was  to  be  sold  privately,  as 
wanted,  at  the  minimum  price.  During  the  next 
twenty  years  the  net  sales  of  government  lands 
were  13,642,536  acres,  from  which  the  sum  of 
$27,900,379.29  was  realized.5  In  1820  the  mini- 
mum price  of  land  was  reduced  to  $1.25  per  acre. 

1  See  The  Public  Domain,  by  Donaldson,  p.  196. 

2  Ibid.,  p.  197. 

3  Ibid.,  p.  200. 

4  Ibid.,  p.  201 

5  Ibid.,  p.  203. 

201 


AGRICULTURAL    ECONOMICS 

The  revenue  idea  was  gradually  abandoned  and 
the  settlement  of  the  western  country  came  to  be 
looked  upon  as  the  principal  end  in  view  in  the 
disposition  of  the  public  domain. 

The  preemption  system,  which  gave  the  prefer- 
ence to  actual  settlers  in  the  sales  of  land  at  the 
minimum  price,  was  embodied  in  sixteen  special 
Acts  between  1801  and  1841.  At  the  latter  date 
a  general  Act  was  passed  which,  with  minor 
changes,  remained  in  force  until  1891.  The 
actual  settlers  were  permitted  to  enter  upon  tracts 
of  land  not  larger  than  160  acres  nor  less  than 
40  acres  before  such  lands  had  been  offered  at 
public  sale.  The  requirements  were  that  the  per- 
son should  reside  in  a  dwelling  upon  the  tract,  im- 
prove and  cultivate  a  part  of  the  land,  and  after 
a  limited  period  pay  $1.25  per  acre. 

"The  preemption  system,"  says  Donaldson,1 
"arose  from  the  necessities  of  settlers,  and 
through  a  series  of  more  than  57  years  of  experi- 
ence in  attempts  to  sell  or  otherwise  dispose  of 
the  public  lands.  The  early  idea  of  sales  for  reve- 
nue was  abandoned  and  a  plan  of  disposition  for 
homes  was  substituted.  The  preemption  system 
was  the  result  of  law,  experience,  executive  orders, 
departmental  rulings,  and  judicial  construction. 
It  has  been  many-phased,  and  was  applied  by 
special  acts  to  special  localities,  with  peculiar  or 
additional  features,  but  it  has  always  and  to  this 

1  See  The  Public  Domain,  by  Donaldson,  p.  215. 
202 


MEANS    OF    ACQUIRING    LAND 

day  [1880]  contains  the  germ  of  actual  settle- 
ment, under  which  thousands  of  homes  have  been 
made  and  lands  made  productive,  yielding  a  profit 
in  crops  to  the  farmer  and  increasing  the  resources 
of  the  Nation." 

The  Homestead  Act  of  1862  was  the  final  step 
in  the  direction  of  free  land  for  actual  settlers. 
This  law  was  the  result,  in  part  at  least,  of  the 
agitations  of  the  Free  Soil  Democrats.  They 
claimed  "that  the  public  lands  of  the  United 
States  belong  to  the  people,  and  should  not  be  sold 
to  individuals,  nor  granted  to  corporations,  but 
should  be  held  as  a  sacred  trust  for  the  benefit  of 
the  people,  and  should  be  granted  in  limited  quan- 
tities, free  of  cost,  to  landless  settlers."1 

The  homestead  law  enables  the  landless  farmers 
to  secure  a  quarter-section,  160  acres,  of  land  and 
acquire  a  title  to  the  same  by  maintaining  resi- 
dence thereupon  and  improving  and  cultivating 
the  land  for  the  continuous  period  of  five  years.2 

"The  homestead  act,"  says  Donaldson,3  writ- 
ing in  1880,  "is  now  the  approved  and  preferred 
method  of  acquiring  title  to  the  public  lands.  It 
has  stood  the  test  of  eighteen  years,  and  was  the 
outgrowth  of  a  system  extending  through  nearly 
eighty  years,  and  now,  within  the  circle  of  a  hun- 

1  See  The  Public  Domain,  by  Donaldson,  p.  332. 
a  Circular    from    the    General     Land    Office    showing    the 
manner  of  proceeding  to   obtain   title  to  public  lands,    1904, 


3  See  The  Public  Domain,  by  Donaldson,  p.  350. 
203 


AGRICULTURAL    ECONOMICS 

dred  years  since  the  United  States  acquired  the 
first  of  her  public  lands,  the  homestead  act  stands 
as  the  concentrated  wisdom  of  legislation  for  set- 
tlement of  the  public  lands.  It  protects  the  gov- 
ernment, it  fills  the  states  with  homes,  it  builds  up 
communities,  and  lessens  the  chances  of  social 
and  civil  disorder  by  giving  ownership  of  the  soil, 
in  small  tracts,  to  the  occupants  thereof.  It  was 
copied  from  no  other  nation's  system.  It  was 
originally  and  distinctively  American,  and  re- 
mains a  monument  to  its  originators." 

Under  the  homestead  law  233,043,939  acres 
had  been  entered  up  to  June  30,  1904. 

From  1873  to  1891  a  Timber  Culture  Act  was 
in  force.  This  Act,  as  first  passed,  enabled  "any 
person''  to  obtain  not  more  than  160  acres  of  land 
by  planting  40  acres  of  timber  and  properly  car- 
ing for  the  same  for  ten  years.  The  number  of 
acres  of  timber  required  was  finally  reduced  to  10, 
and  the  period  of  cultivation  to  eight  years.  The 
privilege  came  to  be  restricted,  however,  to  per- 
sons twenty-one  years  of  age,  heads  of  families, 
citizens  of  the  United  States,  or  one  who  has  filed 
his  declaration  of  intention  to  become  such.  The 
law  was  a  failure  from  the  standpoint  of  timber 
culture,  but  in  all  44,229,950  acres  of  land  were 
entered  by  this  method. 

The  total  area  included  in  farms  was  more 
than  doubled  between  1860  and  1900.  The  acre- 
age in  farms  was  407,212,538  in  1860,  and  in 
204 


MEANS    OF    ACQUIRING    LAND 

1900  it  was  838,591,774.  The  importance  of  free 
land  in  this  increase  in  the  total  area  of  land  in 
farms  is  shown  by  the  fact  that  between  January 
i,  1863,  and  June  30,  1900,  188,149,032  acres  of 
land  were  entered  under  the  homestead  laws.  It 
is  estimated  that  public  lands  had  been  disposed  of 
by  the  government  prior  to  June  30,  1860,  to  the 
extent  of  417,587,322  acres;1  whereas  524,509,- 
414  acres  have  been  disposed  of  since  that  date. 

The  following  figures  show  the  number  of  acres 
of  land  disposed  of  by  the  government  for  each 
year  from  1863  to  1904.  In  column  A  is  given 
the  acreage  of  original  homestead  entries.  In  col- 
umn B  is  given  the  area  disposed  of  for  cash,  the 
total  acreage  of  original  entries  under  the  Home- 
stead Acts  and  the  Timber  Culture  Acts,  the  total 
acreage  located  with  agricultural  college  and  other 

1  Donaldson  (Public  Domain,  p.  519)  says:  "The  disposi- 
tion of  the  public  domain  from  its  origin  to  June  30,  1883,  is 
estimated  at  about  620,000,000  acres."  From  this  number 
has  been  subtracted  the  sum  of  the  amounts  annually  dis- 
posed of  each  year  from  June  30,  1860,  to  June  30,  1883,  or 
202,412,322  acres.  It  will  be  noted  that  the  total  amount  dis- 
posed of  from  the  origin  of  the  public  domain  to  June  30, 
1904,  according  to  these  figures  is  942,096,736  acres.  Whereas 
according  to  the  report  of  the  Land  Office  for  1904,  the  total 
area  appropriated  prior  to  June  30  of  that  year  was  794,794,384 
acres.  This  discrepancy  is  easily  accounted  for  by  the  fact 
that  considerable  quantities  of  the  land  selected  by  railways 
or  entered  by  individuals  under  the  various  Acts,  was  restored 
to  the  public  domain  and  became  subject  to  entries  and  selec- 
tions a  second  time ;  794,794,384  acres  represents  the  net 
amount  disposed  of  for  the  whole  period,  but  it  is  impossible 
to  ascertain  the  net  amount  disposed  of  each  year,  so  the 
amounts  disposed  of  each  year,  without  regard  to  the  amounts 
restored  to  the  public  domain,  are  taken  as  representing  the 
importance  of  this  means  of  acquiring  land. 
205 


AGRICULTURAL    ECONOMICS 


kinds  of 

scrip,   with  military 

bounty-land  war- 

rants,  and 

selected  by  states  and  railways. 

A. 

Original  Homestead 

B. 

Entries. 

Total. 

Date. 

Acres. 

Acres. 

1863 

1,040,989 

2,966,699 

1864 

I,26l,593 

3,281,866 

1865 

1,160,533 

4,513,738 

1866 

1,892,517 

4,629,313 

1867 

1,788,043 

7,04I,H5 

1868 

2,328,923 

6,655,742 

1869 

2,737,365 

7,666,152 

1870 

3,698,910 

8,095,413 

1871 

4,600,326 

10,765,705 

1872 

4,671,332 

11,864,976 

1873 

3,793,613 

13,030,607 

1874 

3,518,862 

9,530,873 

1875 

2,356,058 

7,070,271 

1876 

2,875,910 

6,524,326 

1877 

2,178,098 

4,849,768 

1878 

4,418,345 

8,686,179 

1879 

5,26o,III 

9,333,383 

1880 

6,045,571 

14,792,372 

1881 

5,028,101 

10,893,397 

1882 

6,348,045 

14,309,166 

1883 

8,171,914 

19,430,033 

1884 

7,831,510 

27,531,170 

1885 

7,415,886 

20,995,516 

1886 

9,145,136 

22,124,564 

1887 

7,594,350 

25,858,038 

1888 

6,676,616 

24,485,834 

1889 

6,029,230 

17,036,673 

1890 

5,531,679 

12,798,837 

1891 

5,040,394 

10,477,700 

1892 

7,716,062 

13,664,019 

1893 

6,808,792 

11,891,144 

1894 

8,046,968 

10,406,101 

1895 

5,009,491 

8,406,849 

1896 

4,830,915 

13,209,523 

206 

MEANS    OF    ACQUIRING    LAND 

A. 

Original  Homestead  B. 

Entries.  Total. 

Date.                            Acres.  Acres. 

1897  4,452,290  7,839,117 

1898  6,206,558  8,453,897 

1899  6,177,587  9,182,413 
1000           8,478,409  13,453,888 

1901  9,479,275  15,562,796 

1902  14,033,246  19,488,535 

1903  11,193,120  22,824,300 

1904  16,171,266  16,405,822 


Total 233,043,939  518,027,830 

From  the  above  table  it  will  be  noted  that  dur- 
ing the  decade  from  1890  to  1900,  the  amount  of 
land  disposed  of  by  the  government  was  much 
smaller  than  for  the  decade  from  1880  to  1890. 
This  falling  off  was  looked  upon  at  the  time  as 
suggesting  that  all  the  more  desirable  lands  had 
been  selected  from  the  public  domain.  Since 
1900,  however,  the  number  of  acres  disposed  of 
each  year  has  been  much  greater, — rising  to  al- 
most twenty-three  millions  in  the  year  ending  June 
30,  1903.  In  1902,  nearly  four  and  one-half  mil- 
lions of  acres  were  disposed  of  in  Oklahoma,  and 
slightly  more  than  two  and  a  half  millions  in 
North  Dakota.  There  were  five  states  in  which 
more  than  one  million  acres  of  land  w.ere  disposed 
of  in  1902,  namely,  Wyoming,  Montana,  Oregon, 
Washington,  and  Colorado.  In  1903,  nearly 
three  millions  of  acres  were  disposed  of  in  each 
of  the  two  states,  Florida  and  North  Dakota,  two 
millions  in  Wyoming,  and  between  one  and  two 
207 


AGRICULTURAL    ECONOMICS 

millions  in  Colorado,  Mississippi,  Oklahoma, 
Oregon,  and  Washington.  During  the  past  ten 
years  more  land  has  been  disposed  of  by  the  gov- 
ernment in  Oklahoma  than  in  any  other  state  or 
territory.  North  Dakota  ranks  second  in  this 
respect.  These  facts  suggest  that  the  opening  of 
Indian  reservations  to  white  settlers  has  been  the 
most  prominent  factor  in  bringing  about  an  in- 
crease during  the  last  few  years  in  the  number  of 
acres  disposed  of  by  the  government. 

That  the  free  distribution  of  farms  will  soon 
reach  its  limit  is  shown  by  the  fact  that  three- 
fourths  of  the  total  land  area  of  the  United  States, 
exclusive  of  Alaska  and  the  insular  possessions, 
has  been  appropriated  or  reserved.  Out  of  the 
total  area  of  1,900,947,200  acres,  there  yet  remain 
about  473,836,000  acres  unappropriated  and  unre- 
served. Of  this  270,267,760  acres  have  been  sur- 
veyed. This  land  which  is  still  open  for  appro- 
priation is  found  principally  in  Arizona,  Califor- 
nia, Colorado,  Idaho,  Montana,  Nevada,  New 
Mexico,  North  Dakota,  Oregon,  Utah,  and  Wy- 
oming. Most  all  of  the  land  which  is  desirable 
for  agricultural  purposes  has  been  appropriated 
or  reserved.  When  an  Indian  reservation  is  now 
thrown  open  to  settlers  there  are  many  applicants 
for  every  desirable  piece  of  land.  In  the  summer 
of  1904  there  were  in  one  case  106,308  persons 
registered  with  the  hope  of  drawing  farms  where 
208 


MEANS    OF    ACQUIRING    LAND 

there  were  but  2,412  pieces  of  land  of  160  acres 
each  for  distribution.1 

The  presence  of  unoccupied  lands  of  good 
quality  which  has,  hitherto,  made  the  task  of 
acquiring  landownership  an  easy  one  in  this  coun- 
try, will  be  of  less  and  less  significance  as  the 
years  go  by,  and  other  considerations  will  become 
more  and  more  important.  This  leads  us  to  study 
the  importance  of  gift  and  inheritance  as  means  of 
acquiring  landownership. 

Section  II.  Gift  and  Inheritance. — A  vast 
amount  of  wealth  passes  on  from  generation  to 
generation  by  gift  and  inheritance.  Hence  it  is 
not  necessary,  in  order  to  maintain  the  class  of 
landowning  farmers  in  a  country  where  this  class 
is  already  established,  that  each  succeeding  gen- 
eration of  farmers  should  save  from  the  profits 
of  their  industry  sufficient  wealth  to  purchase 
their  farms,  and  to  hand  this  accumulated  wealth 
over  to  the  preceding  generation  of  landowners. 
This  would  be  necessary,  however,  in  order  to 
reestablish  a  class  of  landowning  farmers  in  one 
generation  in  a  country  where  landlordism  has  be- 
come universal.  In  England,  where  most  of  the 
land  is  owned  by  a  comparatively  small  number  of 
landlords,  the  estates  are  handed  down  from  gen- 
eration to  generation  and  thus  remain  the  property 
of  the  landlord  class;  and  in  that  country  it  is 

1  General  Land-Office  Report,   1904,  p.  13. 
14  209 


AGRICULTURAL    ECONOMICS 

unusual  indeed  for  a  tenant  farmer  to  undertake 
to  purchase  a  farm.  In  Germany,  where  peas- 
ant proprietorship  is  the  rule,  the  farms  are 
handed  down  from  father  to  son  by  inheritance, 
and  thus  the  property  is  kept  in  the  hands  of  the 
tillers  of  the  soil.  The  conditions  with  respect 
to  inherited  wealth  are,  therefore,  of  great  impor- 
tance in  determining  the  status  of  farmers  with 
respect  to  landownership. 

In  the  United  States  it  is  a  matter  of  common 
observation  that  farmers  who  are  able  to  do  so, 
assist  their  sons  in  buying  farms.  This  assist- 
ance may  be  relatively  very  great  in  the  case  of  a 
wealthy  farmer  who  has  a  small  family;  and 
again  it  may  be  very  small  in  the  case  of  a  farmer 
in  moderate  circumstances,  who  has  a  large  num- 
ber of  children  among  whom  he  wishes  to  distrib- 
ute his  assistance.  Often  the  home  farm  is 
greatly  enlarged  by  purchasing  a  "forty"  here  and 
an  "eighty"  there  while  the  boys  are  growing  to 
manhood,  and  then  parceled  out  as  the  young  men 
wish  to  establish  homes  for  themselves.  Again, 
when  the  parents  are  gone,  the  remainder  of  their 
accumulated  wealth  passes  by  inheritance  to  their 
sons  and  daughters  and  helps  very  greatly  in  the 
enlargement  of  their  farms  as  their  growing  fami- 
lies make  larger  farms  desirable. 

The  movement  of  population  from  country  to 
city,  which  has  been  so  great  in  recent  years  in 

210 


MEANS    OF    ACQUIRING    LAND 

this  country,  results  in  the  movement  of  a  vast 
amount  of  wealth  away  from  the  agricultural  in- 
dustry, which  must  be  replaced  from  some  source 
if  the  wealth  of  farmers  is  not  to  decline.  The 
general  principle  may  be  thus  stated:  The 
greater  the  amount  of  land  and  other  forms  of 
wealth  acquired  by  one  generation  and  trans- 
mitted to  the  farmers  of  the  next,  and  the  more 
evenly  this  wealth  is  distributed,  the  greater  the 
ease  with  which  the  ownership  of  land  may  be  ac- 
quired by  the  succeeding  generations  of  farmers ; 
but  the  larger  the  farm  families  of  a  given  com- 
munity, and  the  larger  the  percentage  of  each 
succeeding  generation  who  seek  a  livelihood  in 
other  industries,  the  greater  the  amount  of  wealth 
which  will  be  drawn  from  agriculture  into  other 
industries  by  gift  and  inheritance,  and  the  smaller 
the  part  which  inherited  wealth  will  play  in  the 
acquisition  of  landownership. 

The  number  of  persons  employed  in  the  various 
other  occupations  has  increased  much  more  rap- 
idly than  has  the  number  engaged  in  agriculture. 
This  is  shown  by  the  following  table  which  gives 
the  proportion  of  those  engaged  in  all  gainful 
occupations,  which  were  employed  in  "agricul- 
tural pursuits."1 

1  Twelfth  Census  of  the   United  States,  1900,   Special  Re- 
ports, Occupations,  pp.  xxx,  1. 


211 


AGRICULTURAL    ECONOMICS 

Percentage 

Date  Engaged  in 

Agriculture 

1820 87, 1 

1840 77-5 

1870 47-5 

1880 44-3 

1890 39.2 

1 900 35-6 

Perhaps  the  most  important  explanation  of  this 
more  rapid  increase  in  the  percentage  of  those 
engaged  in  other  occupations  than  agriculture,  is 
the  transfer  of  a  share  of  the  agricultural  popula- 
tion to  the  other  industries.  This  has  often  been 
spoken  of  as  the  movement  from  the  country  to 
the  city.  Men  who  have  long  been  farmers 
sometimes  move  to  the  cities  and  enter  other  occu- 
pations, but  what  is  more  significant  than  this  is 
the  movement  of  the  farm  boys  from  country  to 
city.  A  large  percentage  of  the  boys  who  are 
brought  up  in  the  country  are  educated  and  sent 
into  the  city,  where  they  enter  occupations  of 
every  description.  A  large  percentage  of  the  men 
who  control  the  industries  of  cities  to-day  were 
one  time  farm  boys. 

This  movement  from  country  to  city  has  been 
especially  rapid  in  the  last  twenty  years  and  that 
for  two  reasons :  First,  agricultural  methods 
have  been  transformed  by  the  introduction  of 
labor-saving  machinery,  until  a  much  smaller  per- 
centage of  the  total  working  population  is  re- 
quired to  produce  the  same  supply  per  capita  of 

212 


MEANS    OF    ACQUIRING    LAND 

food  stuffs  and  raw  materials.  Second,  the 
manufacturing  industries  have  been  developing 
rapidly  during  the  same  period,  giving  oppor- 
tunity for  a  share  of  the  increasing  farm  popu- 
lation to  find  remunerative  employment  in  the 
industries  of  the  cities.  To  quote  Dr.  A.  C. 
True,  "Between  1870  and  1890,  speaking  rela- 
tively and  in  round  numbers,  two  million  men 
gave  up  farming  and  went  to  join  the  great  army 
of  toilers  in  our  cities.  Taking  their  families  into 
account,  six  million  people  from  the  farm  were 
added  to  the  population  of  the  town.  .  .  .  Men 
leave  the  farms  because  they  are  not  needed  there. 
The  introduction  of  labor  saving  machinery  and 
rapid  transportation  has  produced  the  same  result 
in  agriculture  as  in  manufactures.  A  smaller 
number  of  men  working  in  our  fields  turn  out  a 
much  greater  product  than  the  greater  number  of 
laborers  could  possibly  secure  in  olden  times,  and 
the  products  of  all  lands  are  easily  carried  where 
they  are  needed.  .  .  .  Within  the  past  twenty-five 
years,  invention  has  gained  the  mastery  in  agri- 
culture as  in  other  arts.  The  brain  of  man  has 
triumphed  over  his  hand  here  as  elsewhere."1 

If  only  the  poor  moved  from  country  to  city, 
the  total  wealth  of  the  country  would  be  affected 
but  little  by  this  movement  of  population.  But 
the  rich  farmers  are  quite  as  apt  to  move  to  the 
cities  as  are  the  poor  ones,  in  fact  they  are  per- 

*A.  C.  True,  The  Arena,  Vol.  17,  Pp.  538-9- 
213 


AGRICULTURAL    ECONOMICS 

haps  more  likely  to  do  so,  for  they  are  in  a  posi- 
tion to  live  from  the  rent  of  their  farms  as  many 
retired  farmers  are  doing  in  nearly  every  town 
of  the  country.  The  sons  of  the  well-to-do  farm- 
ers are  more  likely  to  receive  an  education  and  to 
be  attracted  to  other  pursuits  than  are  the  sons 
of  poor  farmers;  on  the  other  hand,  it  may  be 
true  in  many  cases  that  the  son  of  a  poor  farmer 
would  be  more  likely  to  seek  employment  in  the 
city  because  his  chances  of  getting  a  start  in  the 
country  are  not  so  good  as  those  of  the  young  man 
with  a  well-to-do  father  to  aid  him. 

This  stream  of  population  is  carrying  a  vast 
amount  of  wealth  from  country  to  city  every  year. 
This  movement  of  wealth  from  country  to  city 
has  rightly  been  given  as  one  cause  of  an  increase 
in  the  percentage  of  tenancy,  for  it  transfers  to  the 
city  the  owners  of  many  farms,  and  these  farms 
are  cultivated  by  tenants  until  some  farmer  is 
able  to  acquire  its  ownership  by  transferring  to 
the  city-owner  an  equivalent  amount  of  wealth. 

Thus  while  gift  and  inheritance  are  economic 
conditions  of  great  importance  in  determining  the 
status  of  farmers  with  respect  to  landownership, 
and  make  any  rapid  change  in  their  status  in  this 
regard  impossible,  some  other  means  of  accumu- 
lating wealth  must  be  available  if  the  present  per- 
centage of  landowning  farmers  is  to  be  main- 
tained. This  leads  to  the  investigation  of  savings 
214 


MEANS    OF    ACQUIRING    LAND 

in  agriculture  as  a  means  of  acquiring  landowner- 
ship. 

Section  III.  Savings. — The  process  of  saving 
from  the  earnings  of  many  years  and  making  a 
purchase,  is  a  means  of  acquiring  landownership 
which  is  of  especial  significance  in  the  considera- 
tion of  the  conditions  which  make  it  possible  for 
tenant  farmers  to  become  landowners.  The  ma- 
jority of  the  tenants  are  able  to  save  from  their 
earnings,  because  their  net  returns  are  more  than 
enough  to  cover  the  expenses  of  living.  When 
long  periods  of  time  are  taken  into  consideration, 
the  prices  of  agricultural  products  tend  to  be  such 
that  the  total  product  of  the  least  capable  farmer 
who  can  remain  permanently  in  the  business  will 
equal  his  cost  of  living  and  all  other  annual  ex- 
penditures, including  rent  and  normal  returns  on 
permanent  investments.  This  is  true  partly  be- 
cause long-time-average  prices  are  a  most  impor- 
tant factor  in  determining  the  degree  of  efficiency 
which  is  necessary  for  making  a  living  by  farm- 
ing, and  all  who  do  not  prove  themselves  efficient 
to  that  degree  must  leave  agriculture  to  those  who 
are  more  capable ;  again,  it  is  true  partly  because 
the  long-time-average  price  must  be'  such  as  will 
encourage  the  production  of  sufficient  produce  to 
supply  the  effective  demands  of  the  people,  and 
the  least  capable  farmer  who  is  required  to  pro- 
duce this  supply  must  receive  prices  which  will 
enable  him  to  live  in  accordance  with  his  idea  of 
215 


AGRICULTURAL    ECONOMICS 

a  living,  to  pay  rent,  wages  (unless  he  and  his 
family  do  all  the  work,  in  which  case  this  item  is 
included  in  a  living),  wear  and  tear  on  machin- 
ery and  normal  returns  on  permanent  investments. 

It  is  true,  certainly,  that,  at  any  given  time, 
there  are  those  who  are  producing  at  a  loss,  others 
who  are  just  able  to  make  both  ends  meet,  and 
still  others, — and  ordinarily  this  class  includes 
the  vast  majority, — who  are  able  to  make  an  extra 
profit  because  of  their  superior  ability.  This  will 
be  easily  understood  if  we  refer  to  the  figures 
which  are  available  showing  the  cost  of  producing 
maize.1  From  the  figures  published  by  the  Illinois 
Experiment  Station,  it  is  possible  to  compile  a 
list  showing  the  variations  in  the  cost  of  produc- 
ing maize,  which  list  shows  that  in  the  vast  ma- 
jority of  the  cases  reported  the  cost  of  producing 
the  maize  was  far  below  the  market  price.  The 
items  included  under  costs  are :  breaking  stalks, 
plowing,  disking,  harrowing,  rolling,  planting, 
cultivating,  husking,  seed  maize,  and  rent.  The 
numbers  are  averages  for  counties;  but  as  the 
average  number  of  returns  per  county  was  not 
more  than  four,  the  process  of  averaging  by  no 
means  eliminated  the  variations,  and  the  figures 
show  wide  differences  in  the  costs  of  producing 
maize. 

The    following    figures    show    the    costs,    per 

1  Bulletin   No.   50   of   the    Illinois    Agricultural    Experiment 
Station,  Table  i. 

216 


MEANS    OF    ACQUIRING    LAND 

bushel,  of  producing  maize  in  Illinois  as  presented 
in  Bulletin  No.  50.  Before  each  statement  of 
costs  is  placed  in  parenthesis  the  number  of  re- 
turns averaged.  The  county  averages  are  so 
arranged  that  they  read  in  succession  from  the 
highest  to  the  lowest  cost  of  production.  (2) 
38.8,  (2)  31.5,  (i)  29.5,  (2)  28.5,  (i)  26.8, 

(2)  25.8,  (i)  25.4,   (2)  25.4,   (4)  23.9,   (2)  22.2, 
(i)  22.1,   (2)  22.0,   (2)   21.8,   (i)  21.0,   (i)  20.5, 

(6)  20.4,  (6)  19.7,  (2)  18.8,  (2)  18.6,  (3)  18.3, 

(1)  18.2,  (4)  18.2,  (5)  18.2,  (2)  17.7,  (5)  17.6, 
(4)  17.6,  (5)  17.5,  (4)  17-4,  (8)  17-3,  (6)  17-3, 
(9)  17.3,  (6)  17.3,  (2)  17.2,  (4)  17-2,  (2)  17.0, 

(3)  16.9,   (3)    16.9,   (12)    16.9,   (2)    16.8,   (8) 
16.7,  (6)  16.6,  (i)  16.3,  (3)  16.1,  (4)  16.1,  (i) 
16.1,  (i)   15.6,  (i)   15.6,  (3)   15.6,  (23)   15.5, 
(3)  !5-3>  (3)  15-2,  (i)  15-2,  (4)  15-2,  (2)  15.1, 

(2)  15.1,  (7)  15.0,  (4)  15-0,  (3)  i4-9>  (2)  I47> 

(1)  14.6,  (4)  14.6,  (2)  14.2,  (8)  14.2,  (4)  14-0, 
(8)  13.5,  (2)  13.4,  (2)  13.2,  (2)  12.7,  (i)  12.4, 

(2)  12.4,  (i)  12.2,  (i)  u.8,  (6)  1 1.6,  (6)  11.3. 
These  figures  show  a  variation  in  the  cost  of 

producing  maize,  ranging  from  38.8  to  11.3  cents 
per  bushel.  Could  the  returns  of  the  separate 
producers  be  compared,  instead  of  the  county 
averages,  a  wider  variation  in  costs  would  doubt- 
less be  found. 

This  differential  gain,  or  profit  due  to  superior 
ability  is  the  condition  which,  even  where  gift 
and  inherited  wealth  are  insignificant,  make  it 
217 


AGRICULTURAL    ECONOMICS 

possible  for  farmers  to  accumulate  wealth  and  to 
become  the  owners  of  farms.  It  is  true,  certainly, 
that  the  more  efficient  may  live  much  better  than 
the  least  capable,  or  marginal  farmers,  and  thus 
the  habits  of  life  may  reduce  the  power  of  the 
more  efficient  farmers  to  save  from  their  profits. 
But  the  condition  which  gives  rise  to  this  differ- 
ential gain  certainly  makes  it  possible  for  the 
more  efficient  tenant  farmers  to  buy  land. 

The  greater  the  number  of  those  who  have 
gained  a  degree  of  efficiency  above  that  of  the 
marginal  farmers  and  the  greater  the  difference 
between  the  degree  of  efficiency  of  the  majority 
of  farmers  and  that  of  the  marginal  farmers,  the 
greater  is  the  differential  gain  which  will  go  to 
farmers  as  personal  profits,  and  the  better  able 
they  will  be  to  become  landowners.  On  the  other 
hand  the  more  homogeneous  the  farmers  who  sup- 
ply the  market,  that  is,  the  smaller  the  number 
who  have  gained  a  degree  of  efficiency  above  that 
of  the  marginal  farmer  and  the  less  this  degree 
of  difference,  the  smaller  is  the  total  differential 
profit  and  the  less  able  are  tenant  farmers  to  ac- 
cumulate sufficient  wealth  to  buy  a  farm. 

Section  IV.  Credit. — It  is  a  common  practise 
in  the  United  States  for  farmers  to  borrow  money 
to  invest  in  land.  When  a  young  man  has  saved 
enough  money  to  pay  some  share,  say  half  or  two- 
thirds  of  the  price  of  the  farm,  he  borrows  the 
remainder  and  makes  an  investment,  a  mortgage 
218 


MEANS    OF    ACQUIRING    LAND 

being  given  to  secure  the  loan.  This  enables  the 
farmer  to  buy  land  much  sooner  than  he  could 
if  he  were  required  to  save  the  entire  amount  be- 
fore making  the  purchase.  Where  too  high  a 
rate  of  interest  is  not  charged,  it  is  often  more 
desirable  to  pay  interest  than  to  pay  rent ;  for  the 
difficulty  of  adjusting  the  relations  between  land- 
lord and  tenant  is  in  this  way  removed,  and  the 
farmer  is  free  to  improve  the  land  as  he  chooses, 
knowing  the  benefits  will  be  his  own. 

A  study  of  the  mortgage  indebtedness  of  farm- 
ers in  the  United  States,  in  1890,  showed  that 
1 8.6  per  cent,  of  all  the  farm  families  occupied 
encumbered  farms.  The  total  encumbrance  of 
farm  homes  amounted  to  $1,085,995,960,  which 
was  thirty-five  per  cent,  of  the  total  value  of  the 
encumbered  farms,  and  8.2  per  cent,  of  the  total 
value  of  all  farms.1  An  investigation  of  the  dis- 
tribution of  farm  mortgages2  showed  that 
throughout  the  southern  states  where  the  percent- 
age of  tenancy  was  very  high,  the  percentage  of 
encumbered  farms  was  very  low;  that  the  six 
states  having  the  highest  encumbrance  on  farms 
were  New  York,  Iowa,  Illinois,  Kansas,  Ohio, 
and  Pennsylvania ;  the  total  encumbrance  of  these 
states  being  $553,964,594,  or  51  per  cent,  of  the 
total  for  the  United  States;  yet  with  this  high 
total  encumbrance,  the  mortgages  represented 

1  Eleventh  Census,  Report  on  Farms  and  Homes,  p.  58. 

2  Ibid.,  pp.  58,  66,  C9. 

219 


AGRICULTURAL    ECONOMICS 

only  37.25  per  cent,  of  the  value  of  the  encum- 
bered farms,  and  9.86  per  cent,  of  the  total  value 
of  all  farms  in  these  six  states.  Thus  while  a 
large  per  cent.  (51.)  of  the  farm-mortgage  in- 
debtedness of  the  United  States  is  concentrated  on 
a  small  area,  there  is  also  a  large  per  cent.  (42.3) 
of  the  farm  values  concentrated  on  the  same  area. 
The  following  quotation  from  the  Census  Re- 
port, throws  much  light  upon  the  reasons  why 
mortgages  are  placed  upon  land : 

As  a  result  of  inquiries  made  in  102  selected  counties, 
distributed  throughout  the  United  States,  the  conclusion  is 
that  80.13  per  cent,  of  the  mortgages  in  force  were  made  to 
secure  the  purchase  price  of  real  estate  and  to  make  real 
estate  improvements,  when  these  objects  are  not  compli- 
cated with  other  objects,  and  that  the  original  amount  of 
these  mortgages  is  82.66  per  cent,  of  the  total  original 
amount  of  all  mortgages  in  force.  If  to  these  objects  are 
added  the  objects  of  business  and  the  purchase  of  various 
articles  of  personal  property  of  the  more  durable  kind,  such 
as  domestic  animals,  wagons,  farm  machines,  when  not  com- 
bined with  other  objects,  the  mortgages  are  89.82  per  cent 
of  the  entire  number  in  force,  and  their  original  amount  is 
94-37  Per  cent,  of  the  total  original  amount  of  all  mortgages 

in  force The  mortgages  distinctly  representing  a  loss 

of  wealth,  or  wealth  soon  to  be  consumed,  are  embraced  in 
the  description  of  farm  and  family  expenses,  and  their  num- 
ber is  5.4  per  cent,  of  the  total  number  of  mortgages  in  force, 
while  their  original  amount  is  1.73  per  cent,  of  the  total 
original  amount A  distinction  must  be  observed  be- 
tween the  cause  and  the  consequence  of  mortgages.  The 
mortgage,  in  its  motive,  is  for  the  most  part  a  mere  business 
venture,  and,  so  far  as  foreclosures  show,  for  the  most  part 
220 


MEANS    OF    ACQUIRING    LAND 

a  successful  one.    It  becomes  a  misfortune  when  for  any 
reason  it  becomes  a  business  mistake.1 

These  figures,  it  is  true,  refer  to  real-estate 
mortgages  generally;  but  there  is  no  reason  for 
thinking  that  the  mortgage  is  used  for  other  than 
the  securing  of  the  purchase  price  of  real  estate  in 
the  case  of  farm  mortgages  than  in  the  case  of 
other  real  estate  mortgages.  In  general,  we 
would  be  inclined  rather  to  think  that  farm  mort- 
gages were  more  likely  to  be  given  to  secure  the 
purchase  price  than  the  mortgages  on  city  lots,  for 
example,  where  the  total  value  of  the  lot  might  be 
relatively  small  compared  with  the  value  of  the 
business  which  might  be  established  thereon,  and 
which  might  be  an  occasion  for  desiring  to  mort- 
gage the  real  estate  to  secure  funds  to  extend  the 
business.  In  general,  the  conclusion  which 
should  be  drawn  seems  to  be  that  the  mortgages 
on  farms  are  in  the  vast  majority  of  cases  used  as 
a  means  of  making  the  transition  from  tenancy  to 
landownership. 

The  evidence  seems  to  show,  also,  that  the 
farmers  are  usually  successful  in  their  use  of  the 
mortgage  as  a  means  of  acquiring  the  ownership 
of,land.  In  Illinois,  Michigan,  Minnesota,  and 
New  Jersey,  from  one-third  to  one-half  per  cent., 
only,  of  the  farm  mortgages  are  foreclosed  each 

1  Eleventh  Census  of  the  United  States,  1890,  Report  on 
Real  Estate  Mortgages,  p.  310. 

221 


AGRICULTURAL    ECONOMICS 

year;1  and  the  average  duration  of  farm  mort- 
gages in  the  United  States  is  about  five  years.2 
From  this  we  may  conclude  that  in  the  above 
named  states  not  much  more  than  from  one  and 
two-thirds  to  two  and  one-half  per  cent,  of  the 
farm  mortgages  are  foreclosed.  But  we  cannot 
argue  from  this  that  from  ninety-seven  and  one- 
half  to  ninety-eight  and  one-third  per  cent,  of  the 
mortgages  are  duly  paid,  out  of  the  profits  of  agri- 
culture. Many  cases  will  come  to  the  mind  of 
the  reader,  where  the  unsuccessful  aspirants  to 
landownership  have  sold  their  mortgaged  farms 
in  order  to  pay  off  the  mortgage  and  save  a  part 
of  their  original  investment.  Howrever,  it  is  fair 
to  say  that  the  vast  majority  of  such  adventures 
prove  successful. 

A  classification  by  age  groups  of  the  owners  of 
farm  homes,  in  the  United  States,  may  be  ob- 
tained for  the  years  1890  and  1900,  which  gives 
the  percentage  of  the  owned  farm  homes  which 
are  encumbered.  This  classification  is  shown  in 
the  following  table  :3 

1  George  K.  Holmes,  Quarterly  Journal  of  Economics,  1896, 
Vol.  X,  p.  49- 

2  Eleventh  Census,  Report  on  Farms  and  Homes,  p.  109. 

8  These  figures  were  calculated  from  the  Report  on  Farms 
and  Homes  for  1890,  and  from  Vol.  II  of  the  census  for  1900. 


222 


MEANS    OF    ACQUIRING    LAND 

TABLE    5.     THE    PERCENTAGE    OF    OWNED    FARM    HOMES 

WHICH  WERE  KNOWN  TO  BE  ENCUMBERED,  IN  THE 

NORTH    CENTRAL   DIVISION,   IN   1890  AND 

1900,  CLASSIFIED  BY  THE  AGE 

OF  THE  OWNERS. 

A(,-  Percentage  Encumbered 

1890  1900 

Under  25  years t 40.7 43.6 

25  to  34  years 49.5 48.3 

35  to  44  years 49.1 48.3 

45  to  54  years 44.5 41.5 

55  years  and  over , 32. i 32.2 

From  these  figures  it  will  be  seen  that  the  per- 
centage of  encumbrance  increases  from  youth  to 
middle  age,  and  declines  from  middle  age  to  old 
age.  This  fact,  and  also  the  relation  between  the 
increase  in  the  percentage  of  mortgages  and  the 
decline  in  the  percentage  of  tenancy,  is  shown 
more  clearly  in  the  following  table  in  which  the 
one  state  of  Illinois  is  considered,  Illinois  being 
the  one  of  the  northern  states  in  which  the  per- 
centage of  tenancy  is  the  highest : 

TABLE    6.    THE    PERCENTAGE    OF    OWNED    FARM    HOMES 
WHICH  WERE  KNOWN  TO  BE  ENCUMBERED,  AND  THE  PER- 
CENTAGE OF  ALL  FARM  HOMES  WHICH  WERE  KNOWN 
TO  BE  HIRED,  IN  THE  STATE  OF  ILLINOIS, 
FOR  THE  YEAR   1900. 

A_-  Encumbered  Hired 

Aee  Homes  Homes 

Under  25  years 40. i 74.64 

25  to  34  years 47-9 63.25 

35  to  44  years 46.2 42.50 

45  to  54  years 38.8 29.8 

55  to  64  years 31.2 18.29 

$5  years  and  over 21.9 10.60 

223 


AGRICULTURAL    ECONOMICS 

When  we  consider  the  mortgage  in  all  of  its 
relations  it  is  apparent  that  this  is  one  of  the 
important  means  of  acquiring  landownership ; 
and  while  it  sometimes  proves  disastrous,  it  is 
practically  indispensable  in  our  rural  organization, 
and  on  the  whole  it  may  be  looked  upon  as  an 
institution  friendly  to  the  interests  of  the  farmers. 

Section  V.  The  taxation  of  mortgages. — It 
has  been  noted  by  economists  that  the  market  price 
of  land  is  often  greater  than  the  capitalization  of 
the  net  rent  at  the  current  rate  of  interest.  That 
is,  men  are  willing  to  take  a  lower  return  on  in- 
vestments in  land1  than  on  loans, [even  where  the 
security  is  a  farm  mortgage.  This  is  said  to  in- 
crease the  difficulty  of  paying  off  farm  mortgages. 
The  man  whose  farm  is  mortgaged  must  pay,  for 
example,  six  per  cent,  for  the  use  of  money  which, 
as  an  investment  in  land,  is  yielding  him  no  more 
than  four  per  cent. 

With  the  Ricardian  theory  of  distribution  in 
mind,  which  assumes  that  all  farmers  possess  the 
same  degree  of  efficiency,  economists  have  con- 
cluded that  this  discrepancy  between  the  net  rent 
and  the  interest  would  make  it  practically  impos- 
sible for  the  farmers  to  pay  off  their  mortgages. 
It  will  be  readily  understood  from  the  discussion 
of  profits  due  to  superior  ability,  that  all  but  the 
less  efficient  farmers  are  able  to  counterbalance 
this  loss  by  earning  personal  profits,  so  that  the 
fact  of  the  discrepancy  is  not  so  disastrous  as  has 
224 


MEANS    OF    ACQUIRING    LAND 

been  supposed  by  the  economists ;  yet  this  discrep- 
ancy has  an  important  retarding  influence  upon 
the  movement  from  tenancy  to  the  unencumbered 
ownership  of  land. 

This  difference  between  net  rent  and  interest 
is  due  to  many  causes.  Many  of  these  causes 
have  already  been  discussed  in  the  chapter  on  the 
price  of  land ;  but  we  wish  to  emphasize  especially 
the  influence  of  double  taxation  in  this  connec- 
tion. Double  taxation,  the  taxing  of  both  the 
farm  and  the  mortgage  upon  the  farm,  tends  to 
increase  the  difference  between  the  rate  which 
must  be  paid  upon  the  loan  and  the  returns  re- 
ceived upon  investments  in  land.  The  man  who 
lends  money  upon  a  mortgage  wants  at  least  as 
large  a  return  as  if  he  had  purchased  the  land 
himself.  Had  the  man  who  lent  the  money  pur- 
chased the  land  and  rented  it,  he  would  have  paid 
the  land  tax  out  of  the  net  rent.  If  he  lends  the 
money  and  has  to  pay  tax  at  the  same  rate  on  the 
mortgage,  he  will  demand  interest  equal,  at  least 
to  the  net  rent  of  that  proportion  of  the  farm  rep- 
resented by  the  face  of  the  mortgage.  This 
means  that  the  farmer  will  have  to  pay  interest 
equal  to  the  net  rent  and  then  pay  the  land  tax 
besides;  thus  paying  more  in  interest  and  in  the 
tax,  by  the  amount  of  the  tax,  than  he  would  have 
paid  as  a  tenant.  To  tax  a  farm  mortgage  is, 
therefore,  to  tax  a  farmer  for  using  the  mortgage 
as  a  means  of  acquiring  landownership. 
15  225 


AGRICULTURAL    ECONOMICS 

Section  VI.  The  need  of  a  system  for  obtain- 
ing credit  on  land,  the  District  Credit  Associations 
in  Germany. — The  farmers  of  the  United  States 
are  in  need  of  a  good  credit  system.  Not  only  is 
it  important  that  the  young  farmers  who  wish  to 
go  in  debt  for  land  should  be  able  to  borrow  money 
at  a  low  rate  of  interest;  but  it  is  equally  impor- 
tant that  the  tenant  farmers  should  be  able  to 
invest  their  savings  in  a  profitable  manner,  until 
they  have  accumulated  sufficient  capital  to  enable 
them  to  invest  in  land.  It  is  well  known  that  the 
country  bankers  are  not  willing  to  pay  more  than 
four  per  cent,  for  the  savings  which  the  farmers 
may  deposit  with  them ;  and  that  these  same  bank- 
ers will  not  lend  money  to  the  same  men,  on  the 
best  of  security, —  the  farm  mortgage, — for  less 
than  six  per  cent,  with  the  interest  paid  semi- 
annually  in  advance.  It  is  also  true  that  the 
length  of  time  for  which  the  farmers  wish  to  bor- 
row money  is  usually  longer  than  that  for  which 
the  bankers  wish  to  put  their  money  out;  in  fact, 
the  lending  of  money  on  mortgages  is  not  the 
class  of  investment  which  seems  most  congenial  to 
the  ordinary  banker. 

The  banks  are  of  far  less  importance  in  the  mak- 
ing of  loans  to  farmers  for  the  purpose  of  buying 
land,  in  most  communities,  than  are  the  well-to- 
do  and  the  retired  farmers  of  the  neighborhood. 
Nearly  every  community  has  at  least  one  such 
man  in  it.  While  there  are  many  exceptions, 
226 


MEANS    OF    ACQUIRING    LAND 

these  men  are  usually  close-fisted,  and  more  or  less 
miserly  in  character.  They  are  not  willing  to 
take  any  risk.  They  lend  to  the  men  whom  they 
know.  They  take  mortgages  on  land,  the  value 
of  which  they  can  readily  ascertain.  Some  of 
these  men,  perhaps  the  most  of  them,  deal  honor- 
ably ;  but  they  charge  a  higher  rate  of  interest  than 
the  farmers  can  well  afford  to  pay.  But  while 
some,  perhaps  the  most,  of  these  men  who  lend 
money  to  the  farmers  deal  honorably,  there  are 
men  in  this  business  who  have  rightly  been  called 
"land  sharks."  These  men  watch  for  a  chance  to 
foreclose  a  mortgage  and  get  a  farm  for  much 
less  than  its  real  value.  Having  the  farm  in  their 
possession  they  wring  all  they  can  from  the  tenants 
who  are  so  unfortunate  as  to  contract  for  the  land, 
or  they  sell  it  to  some  farmer  who  gives  a  mort- 
gage in  part  payment;  this  done  the  land  shark 
watches  his  chance  to  get  the  farm  again  for  much 
less  than  the  price  for  which  he  sold  it,  as  he  had 
done  before,  and  so  the  process  is  continued  until 
untold  damage  is  done  to  his  fellowmen. 

Besides  these  moneyed  men  who  live  in  the 
neighborhood  and  lend  money  to  the  farmers, 
there  is  usually  some  one  who  acts  as  the  agent  of 
some  large  insurance  company,  and  whose  busi- 
ness it  is  to  lend  the  funds  of  the  company  to  the 
farmers.  These  loans  are  secured  by  mortgages. 
The  company  is  in  no  hurry  for  the  money,  and 
has  no  use  for  the  land.  The  main  objection  to 
227 


AGRICULTURAL    ECONOMICS 

this  means  of  borrowing  money  is  the  rate  of 
interest,  which  is  usually  higher  than  it  should  be, 
and  higher  than  the  farmers  would  have  to  pay 
for  the  use  of  money  if  they  had  the  benefit  of  a 
good  credit  system. 

But  neither  the  local  money  lender  nor  the 
agent  of  the  insurance  company  provide  the  farm- 
ers with  a  means  of  investing  their  savings.  The 
young  farmer  who  saves  but  a  few  hundred  dol- 
lars each  year,  cannot  hope  to  lend  this  money 
on  a  mortgage,  because  those  who  wish  to  borrow 
money  to  invest  in  land  generally  desire  a  larger 
sum  at  one  time.  Hence  the  farmer  finds  the 
country  bank  with  its  low  rate  of  interest,  about 
the  only  chance  for  investing  his  savings  during 
the  years  when  he  is  trying  to  accumulate  enough 
capital  to  enable  him  to  invest  in  land.  When 
the  time  has  come  for  him  to  make  an  investment 
by  paying  half  of  the  value  of  a  piece  of  land  from 
the  savings  of  many  years,  he  is  embarrassed  by 
the  fact  that  while  he  has  been  able  to  get  no 
more  than  four  per  cent,  for  the  use  of  his  money, 
he  must  pay  six  per  cent,  for  the  money  which 
he  wishes  to  borrow.  This  should  certainly  be 
enough  to  convince  the  farmer  that  something 
is  wrong.  The  important  question  is,  Can  any- 
thing be  done  to  remedy  this  condition  of  affairs  ? 

Something  has  been  done  in  other  countries, 
and  there  is  no  reason  why  something  cannot  be 
done  in  this  country  to  give  the  farmer  a  better 


MEANS    OF    ACQUIRING    LAND 

credit  system.  More  than  a  hundred  years  ago 
institutions  were  established  in  Germany  for  the 
purpose  of  lending  money  to  the  farmers  at  a  low 
rate  of  interest;  and  the  years  have  proved  the 
wisdom  of  this  course  of  action.  The  most  im- 
portant institutions  for  making  loans  to  farmers, 
in  Germany,  are  the  district  cooperative  credit 
associations  (Lands chaf ten)  which  are  public,  or 
semi-public  institutions  for  the  purpose  of  lending 
money  on  mortgages.  These  are  organizations 
of  landowners,  who  by  combining  their  resources 
into  an  unlimited  company  are  able  to  borrow 
money  at  a  very  low  rate, — at  a  rate  comparable 
to  that  for  which  the  government  can  float  its 
bonds.  As  the  institution  is  not  intended  for 
profit,  the  loans  are  made  to  landowners  at  a  rate 
just  enough  higher  than  that  paid  by  the  institu- 
tion to  cover  the  costs  of  carrying  on  the  business. 
Money  is  loaned  on  mortgages  to  the  farmers  and 
in  order  to  raise  the  money  for  such  loans,  the 
institution  is  permitted  by  public  authority  to  issue 
mortgage  bonds  to  the  value  of  the  mortgages 
it  holds.  As  all  the  members  of  the  associa- 
tion are  jointly  and  severally  liable  to  the  full 
value  of  their  lands,  the  bonds  are  considered 
excellent  investments,  and  are  floated  at  a  very 
low  rate  of  interest. 

When  the  money  has  been  lent  to  a  farmer  and 
a  mortgage  given  to  secure  the  loan,  it  is  the  regu- 
lar thing  to  collect  a  small  amount  as  a  partial 
229 


AGRICULTURAL    ECONOMICS 

payment  each  year  until  the  whole  amount  is  paid. 
If,  for  example,  the  rate  of  interest  charged  by 
the  institution  is  four  per  cent.,  five  per  cent,  will 
be  collected  each  year.  Four  per  cent,  is  interest 
and  the  one  per  cent,  is  a  partial  payment  which 
accumulates  with  interest  until  at  the  end  of  a 
little  over  forty  years  sufficient  has  been  paid  in  to 
cancel  the  debt.  It  is  also  possible  for  the  more 
thrifty  farmers  to  make  other  payments  which 
shorten  the  period  required  for  canceling  the  debt. 
In  some  cases,  these  partial  payments  must  be  paid 
in  mortgage  bonds,  which  can  be  bought  at  the 
market  price. 

These  mortgage  bonds  make  a  safe  and  ready 
means  of  investing  the  farmers'  savings.  In 
them  the  farmer  finds  a  safe  investment  which  is 
as  permanent  as  he  may  desire  to  have  it,  and  at 
the  same  time  an  investment  on  which  he  can 
realize  at  any  time  in  case  he  decides  to  invest  in 
land.  The  German  form  of  the  institution  may 
not  exactly  meet  our  needs,  but  it  is  certainly  true 
that  the  principle  of  association  is  especially 
desirable  in  any  system  of  land  credit. 

Not  only  do  such  institutions  make  it  possible 
for  the  young  farmers  to  invest  their  savings  until 
they  are  ready  to  buy,  and  then  to  borrow  money 
to  finish  paying  for  the  land,  but  they  make  it 
more  desirable  for  the  retiring  farmers  to  sell  their 
land,  as  they  can  invest  in  bonds  which  are  as  safe 
as  the  investment  in  land  and  pay  practically  the 
230 


MEANS    OF    ACQUIRING    LAND 

same  returns.  Thus  it  is  that  a  good  credit  sys- 
tem is  the  best  means  of  precluding  the  presence 
of  the  tenant  problem. 

The  safety  of  these  institutions  is  insured  by  the 
fact  that  they  are  district  associations.  Each  in- 
stitution operates  only  within  a  very  limited  and 
well  defined  field,  so  that  the  officials  are  able  to 
know  the  men  and  the  land  values  throughout 
the  district. 

The  good  effect  of  this  credit  system  is  evinced 
by  the  fact  that,  in  1895,  only  16.42  per  cent,  of 
the  farms  of  Germany  were  composed  entirely  of 
leased  land;  and  only  12.38  per  cent,  of  all  the 
land  included  in  farms  was  leased  land.  Indeed, 
Germany  is  a  nation  of  landowning  farmers, 
while  in  France  47.2  per  cent,  of  the  cultivated 
area  is  occupied  by  tenants,  and  in  England  the 
landowning  farmer  is  rarely  found. 

Tenancy  in  Germany  is  largely  among  the  occu- 
piers of  the  very  large  and  of  the  very  small 
farms.  This  is  shown  in  the  following  table : 

TABLE  7.     PERCENTAGE  OF  THE  FARMS  OF  VARIOUS   SIZES 

IN  GEPMANY  WHICH  WERE  COMPOSED  SOLELY 

OF  LEASED  LAND,  IN   1895. 

Under  5  acres 19.91 

5  to  12.35  acres 3-54 

12.35  to  49.4 1.97 

49.4  to  247  acres 4.64 

247  acres  and  over 25.68 

Not  only  is  the  percentage  of  tenancy  low,  but 
the  statistics  fail  to  prove  any  important  change 
231 


AGRICULTURAL    ECONOMICS 

in  this  regard  in  recent  years.  In  1882,  15.71 
per  cent,  of  the  farms  were  composed  solely  of 
leased  land,  and  in  1895  the  percentage  was  16.42 ; 
but  at  the  same  time,  12.88  per  cent,  of  all  land  in 
farms  was  leased  land  in  1882,  and  only  12.38 
per  cent,  in  1895.  It  would  appear,  therefore, 
that  there  was  little  change  in  the  status  of  the 
farmers  with  respect  to  landownership  during  this 
period. 

That  this  high  percentage  of  landowning  farm- 
ers is  due  in  a  large  degree  to  the  good  system  of 
land  credit,  is  indicated  by  the  fact  that  the  farms 
of  Prussia,  are  mortgaged  to  about  half  their 
market  value.  And  yet  it  may  be  that  in  this 
high  percentage  of  indebtedness  there  lies  a  dan- 
ger. The  indebtedness  on  land  in  Prussia  in- 
creased twenty-four  per  cent,  during  the  thirteen 
years  from  1883  to  1896;  and  it  may  well  be 
feared  that  while  the  forms  of  landownership  have 
been  retained  the  real  ownership  is  gradually  slip- 
ping away  from  the  farmers  as  surely  as  it  is  in 
our  own  country. 

Even  if  the  good  credit  system  is  not  all  that  is 
needed  to  enable  the  tenant  farmers  to  become 
landowners  in  sufficient  numbers  to  stop  the  de- 
cline in  the  percentage  of  landowning  farmers,  yet 
it  is  certainly  an  important  method  of  facilitating 
the  acquiring  of  landownership  on  the  part  of  the 
farmers,  and  in  this  way  it  is  a  means  of  check- 
ing to  some  extent  the  decline  of  the  class  of  land- 
232 


MEANS    OF    ACQUIRING    LAND 

owning  farmers  in  the  United  States.  Gift,  in- 
heritance, and  profits,  aided  by  a  good  credit  sys- 
tem are  the  most  important  means  of  acquiring  the 
ownership  of  land.  Now  that  the  government 
has  practically  exhausted  its  supply  of  good  farms, 
and  competition  is  driving  the  price  of  land  higher 
and  higher,  it  becomes  more  and  more  important 
that  every  facility  be  provided  the  farmer  for 
making  the  most  of  the  means  which  yet  remain 
for  acquiring  the  ownership  of  land.  The  farmer 
should  have  every  facility  for  acquiring  a  knowl- 
edge of  the  facts  and  principles  which  underlie 
his  art,  in  order  that  he  may  so  operate  his  farm  as 
to  win  large  profits  from  which  to  save  money  to 
invest  in  land.  He  should  be  provided,  also,  with 
a  credit  system  such  as  will  enable  him  to  invest 
his  savings  with  profit,  and  provide  an  economical 
source  of  funds,  such  as  will  avoid  high  rates  of 
interest  and  double  taxation,  when  it  is  desirable 
to  borrow  money  to  invest  in  land. 


233 


AGRICULTURAL    ECONOMICS 

PROBLEM  ILLUSTRATING  THE  FOREGOING  PRINCIPLES. 
I.  Four  farmers,  A,  B,  C  and  D,  are  in  competition  for 
four  grades  of  land,  ist,  2nd,  3rd,  4th.  The  following  fig- 
ures represent  the  value  of  the  produce  which  the  farmers 
of  each  grade  can  produce  on  the  land  of  different  grades 
as  a  result  of  the  expenditure  of  six  dollars'  worth  of  labor 
and  capital. 


Grades  of  Land. 

Grades  of  Farmers. 

I. 

II. 

ill. 

IV. 

A 

13-5 

12. 

10.5 

9 

B 

12. 

10.67 

9-33 

8 

C 

10.5 

9-33 

8.17 

7 

D 

9- 

8. 

7- 

6 

(a)  How  much  differential  rent  would  be  paid  for  the 
amount  of  land  employed  in  each  case  (allowing  5  cents 
as  a  margin  in  each  case)  ? 

(b)  Supposing  that  the  six  dollars  are  expended  upon 
one  acre  in  case  of  the  fourth  grade  land,  and  that  the  third 
grade  land  is  farmed  5  per  cent,  more  intensively  than  the 
fourth  grade,  and  the  second  grade  10  per  cent,  and  the 
first  grade  15  per  cent,  more  intensively  than  the  fourth 
grade,  how  much  would  the  rent  per  acre  be  on  each  grade 
of  land? 

(c)  Supposing  that  the  net  rent  is  go  per  cent,  of  the 
gross  rent,  and  that  the  current  rate  of  interest  on  safe  loans 
is  five  per  cent.,  what  would  be  a  fair  capitalization  of  the 
income  of  each  piece  of  the  land? 

(d)  Supposing  that  all   farmers  live  equally  well,  and 
leaving  out  of  account  the  influence  of  variations  in  quan- 
titative efficiency,  how  long  would  it  take  each  man  to  pay 
for  the  land  which  he  cultivates  by  saving  from  his  profits 
if  the  land  can  be  purchased  at  its  capital  value  ? 


234 


CHAPTER  XII 

TENANCY  AND   LANDOWNERSHIP  IN  THE 
UNITED  STATES. 

Less  than  two-thirds  of  the  whole  number  of 
farms  in  the  United  States  are  cultivated  by  their 
owners.  According  to  the  census  for  1900, 
twenty-two  and  two-tenths  per  cent,  of  the  farms 
were  operated  by  share  tenants,  thirteen  and  one- 
tenth  per  cent,  by  cash  tenants,  one  per  cent,  by 
managers,  nine-tenths  per  cent,  "by  owners  and 
tenants,"  seven  and  nine-tenths  per  cent,  by  "part 
owners,"  and  fifty-four  and  nine-tenths  per  cent, 
by  owners.  The  following  table  shows  the  per- 
centage of  all  farms  which  were  operated  by  these 
different  classes  of  farmers  in  the  United  States 
and  in  the  geographic  divisions  of  the  country,  as 
shown  by  the  census  for  I9OO.1 

*N.  B. — The  following  instructions  to  the  enumerators  ex- 
plain the  significance  of  the  terms  used  in  the  following  table : 
"OWNER. — If  a  farm  is  cultivated  by  a  person  who  owns 
all  or  a  part  of  it,  by  a  man  whose  wife  owns  all  or  a  part  of 
it,  by  a  widow  or  widower,  by  the  heir  or  heirs  thereto,  or  by 
the  trustees  or  guardian  for  such  heirs,  write  'owner.'  For 
census  purposes  a  settler  on  government  land  who  has  not 
'proved  up,'  a  person  who  has  bought  land  on  a  contract  for  a 

235 


AGRICULTURAL    ECONOMICS 

TABLE  8.    TENANCY  AND  LAND  OWNERSHIP  IN  THE  UNITED 
STATES  IN  1900. 

Part     Own"s  Mana-      Cash       Share 
rs    Owners  T™J?nt|     gers     Tenant!  Tenant! 

United  States 54.9  7.9  .9  i.o  13.1  22.2 

Geographic  divisions 

North  Atlantic 72.3  4.0  .9  2.0  9.8  n.o 

North  Central 57.9  12. 1  1.2  .9  7.5  18.4 

South  Atlantic 49.3  4.9  .6  .9  18.0  26.3 

South  Central  44.8  5.2  .8  .6  17.3  31.3 

Western  69.6  10.1  .6  3.1  7.7  8.9 

Alaska  and  Hawaii  30.5  6.1  5.6  54.9  2.9 

This  table  shows  that  the  percentage  of  tenancy 
is  the  highest  in  the  Southern  divisions  and  the 
lowest  in  the  Western  division.  Farms  operated 
by  managers  are  relatively  most  abundant  in  the 
Western  and  in  the  North  Atlantic  divisions.  In 
the  West  the  farms  operated  by  managers  are 
largely  cattle  and  sheep  ranches  which  are  con- 
ducted for  profit,  while  in  the  East  these  farms 

deed,  or  a  person  who  holds  over  for  redemption,  is  an  owner 
and  must  be  so  marked. 

"OWNER  AND  TENANT. — If  a  farm  is  cultivated  jointly  by  its 
owner  and  by  one  or  more  other  persons  working  for  a  share 
of  the  farm  products,  write  'owner'  after  the  name  of  the 
owner,  and  'share'  after  the  tenant  on  shares. 

"MANAGER. — If  the  frnn  is  cultivated  for  its  owner,  or  pub- 
lic institution,  by  a  salaried  manager,  superintendent,  or 
overseer,  write  'manager.' 

"CASH  TENANT. — If  the  farm  is  cultivated  by  a  tenant  who 
pays  a  fixed  rental  in  money,  or  a  stated  amount  of  labor  or 
farm  commodities  (not  a  proportionate  share  of  all),  write 
'cash.' 

"TENANT  ON  SHARES. — If  the  farm  is  cultivated  by  a  tenant 
who  pays  for  its  use  a  share  (as  one-third,  one-half,  or  other 
proporti-i)  of  the  crops  raised,  write  'share.'"  (See  Twelfth 
Census  of  the  United  States,  1900,  Vol.  V,  p.  759). 


TENANCY  AND   L AND O W N ERS H  I  P 

represent,  in  many  cases,  the  country  homes  of 
wealthy  families. 

The  three  classes,  farms  operated  by,  "owners, 
part  owners,  and  owners  and  tenants,"  may  be 
grouped  together  as  including  the  farms  on  which 
the  owners  have  a  direct  share  in  the  manage- 
ment of  the  land.  These  three  classes  of  farms 
represented  63.7  per  cent,  of  all  farms  in  the 
United  States ;  while  the  percentage  was  78.2  in 
the  North  Atlantic  division,  71.2  in  the  North 
Central  division,  54.8  in  the  South  Atlantic,  50.8 
in  the  South  Central,  and  80.3  in  the  Western 
divisions. 

The  cash  and  share  tenants,  taken  together, 
operate  35.3  per  cent,  of  the  total  number  of  farms 
in  the  United  States.  These  rented  farms  repre- 
sent 30.2  per  cent,  of  the  "improved  area"  in 
farms,  and  23.3  per  cent,  of  the  total  area  in 
farms.  These  same  farms  represent  28.4  per 
cent,  of  the  total  value  of  the  farm  land  and 
buildings,  being  30.1  per  cent,  of  the  total  value 
of  all  farm  land  (exclusive  of  the  value  of  build- 
ings), and  22.7  per  cent,  of  the  value  of  all  farm 
buildings. 

Section  L  The  decline  in  the  percentage  of 
landowning  farmers  in  the  United  States. — There 
were  no  statistics  available  on  the  subject  of  land- 
ownership,  in  the  United  States,  prior  to  1880. 
The  census  of  1880  showed  that  74.44  per  cent. 

237 


AGRICULTURAL    ECONOMICS 

of  the  farms  were  operated  by  owners,  while  25.56 
per  cent,  were  operated  by  tenants.  This 'condi- 
tion of  affairs  gave  rise  to  much  discussion  con- 
cerning the  probable  future  of  the  American 
farmer.  Some  writers  considered  tenancy  a 
transitionary  stage  to  landownership,  while  others 
contended  that  those  who  once  had  owned  land 
finally  lost  it  and  became  tenants, — that  in  time 
tenancy  would  become  general. 

In  1886,  David  B.  King  said:1  "While  there 
are  exceptions,  and  tenants  are  found  who  are  un- 
thrifty, or  whose  lot  is  a  hard  one,  as  a  rule  the 
American  tenant  farmer  prospers,  and  in  very 
many  cases  passes  from  the  tenant  to  the  land- 
owning class.  It  is  a  decided  advantage  to  many 
an  agricultural  laborer  and  farmer's  landless  son 
that  numbers  of  owners  of  farms  have  become  so 
prosperous  that  they  do  not  care  to  till  the  soil 
themselves  [and  for  this],  or,  for  other  reasons 
rent  their  land.  It  often  happens  that  a  young 
man,  engaged  in  agriculture  or  other  labor,  by 
thrift  and  economy,  lays  by  enough  to  stock  a 
small  farm  which  he  rents  'on  shares'  or  for  a 
fixed  sum.  In  a  few  years  he  saves  enough  to 
buy  the  property,  paying  perhaps  one-half  of  the 
purchase  money  at  once,  and  the  remainder  in 
annual  payments  extending  through  several  years. 
The  former  owner  is  secured  by  a  mortgage  on 
the  farm.  By  the  time  the  man  has  reached  mid- 

1  North  American  Review,  Vol.  142,  pp.  256-7. 
238 


TENANCY   AND   L A N D O W N ERS H  I  P 

die  life  he  owns  the  farm  free  of  debt.  ...  It  is 
not  surprising  that  the  casual  observer,  seeing 
many  owners  apparently  deeply  in  debt,  should 
be  alarmed  at  the  state  of  things.  On  closer  ob- 
servation one  finds,  however,  that  in  most  cases, 
the  hard-working  tenant  and  the  interest-paying 
owner  are  both  prosperous  and  rapidly  becoming 
independent." 

Mr.  Henry  Strong,  whose  business  it  was  to 
sell  railroad  lands  and  lend  money  on  farm  mort- 
gages, said;1  "Just  after  the  panic  of  1873,  and 
during  the  years  1874,  5,  and  6,  I  loaned  several 
hundred  thousand  dollars  in  Illinois  and  Iowa 
upon  farm  mortgages,  and  all  of  these  loans,  with 
two  exceptions,  were  paid.  These  exceptions 
were  in  cases  of  large  farmers,  who  were  speculat- 
ing in  cattle  in  the  Chicago  market,  failed  in  busi- 
ness, and  turned  over  the  mortgaged  lands  to  me, 
aggregating  about  three  thousand  acres  of  mostly 
cultivated  farms,  which  I  divided  up  and  rented  to 
about  a  dozen  tenants.  These  lands  were  after- 
wards nearly  all  bought  by  these  tenants,  and  so 
far  as  I  know,  owned  by  them  or  their  grantees. 
....  I  could  cite  a  great  many  similar  instances." 
This  quotation,  which  was  published  in  the  same 
number  of  the  same  magazine  as  that  quoted  from 
Mr.  David  King,  corroborates  the  generalizations 
made  by  the  latter. 

But  while  many  held  this   view  there  were 

8  North  American  Review,  Vol.  142,  p.  251. 
239 


AGRICULTURAL    ECONOMICS 

others  who  believed  that  the  movement  was  rather 
from  free  ownership  of  farms  to  encumbered 
ownership,  and  finally  to  the  ranks  of  the  tenant 
class.  In  a  later  number  of  the  same  magazine 
Henry  George  responded  to  the  articles  by  Messrs. 
King  and  Strong  as  follows :  "Tenancy  is  not 
the  normal  state  of  man,  and  is  so  far  from  being 
the  primary  condition  of  American  agriculture 
that  we  have  been  accustomed  to  look  on  the 
American  farmer  as  necessarily  the  owner  of  the 
acres  he  tilled.  Mr.  Strong  would  have  us  think, 
and  Professor  King  really  seems  to  think,  that 
tenant  farming  is,  in  the  natural  order  of  things, 
the  intermediary  stage  through  which  'Agricul- 
tural laborers'  are  enabled  to  pass  into  a  condition 
of  landowners,  just  as,  in  the  older  handicrafts  the 
condition  of  journeyman  was  the  intermediary 
condition  between  that  of  apprentice,  with  which 
all  craftsmen  must  begin,  and  that  of  master 
workman,  to  which  all  could  aspire.  The  truth  is 
just  the  reverse  of  this.  Tenant  farming  is  the 
intermediary  stage  through  which  independent 
tillers  of  the  soil  have  in  other  countries  passed, 
and  in  this  country  are  now  beginning  to  pass,  to 
the  condition  of  agricultural  laborers  and  chronic 
paupers. 

"But  sufficiently  startling  as  is  the  fact  that  in 

1880,  more  than  one- fourth  of  American  farms 

were  cultivated  by  tenants,  this  of  itself  does  not 

fully  indicate  how  largely  our  agricultural  popu- 

240 


TENANCY   AND   L AN D O W N ERSHI  P 

lation  have  already  been  divorced  from  the  soil. 
Tenancy  is  only  the  later  form  of  the  disease ;  the 
earlier  form  is  the  mortgage."1 

Three  sets  of  statistics  on  tenancy  and  land- 
ownership,  those  for  1880,  1890,  and  1900,  are 
now  available,  and  a  comparison  of  these  figures 
shows  that  there  has  been  a  decline  in  the  per- 
centage of  landowning  farmers  in  the  United 
States  since  1880.  The  extent  of  this  decline  is 
shown  in  the  following  table  :2 

TABLE  9.    TENURE  OF  FARMS  IN  THE  UNITED  STATES. 

•PJ  .  Percentage  of  Farms  Operated  by 

Owners  Cash  Tenants  Share  Tenants 

1880  74.5  8.0  17.5 

1890  71.6  10. o  18.4 

1900  64.7  I3.I  22.2 

This  table  shows  a  decline  of  nine  and  eight- 
tenths  in  the  percentage  of  landowning  farmers 
during  the  last  two  decades  of  the  Nineteenth  Cen- 
tury ;  and  the  decline  has  been  more  rapid  during 
the  decade  from  1890  to  1900  than  during  the 
preceding  decade. 

This  decline  in  the  percentage  of  landowning 
farmers  does  not  necessarily  imply,  however,  that 
farmers  who  once  owned  land  have  lost  it  and 
become  tenant  farmers.  The  ownership  of  land 
is  ever  changing.  If  all  farmers  were  to  cease  ac- 
quiring the  ownership  of  land  for  one  generation, 
there  would  be  no  landowning  farmers  left;  and 

1  North  American  Review,  Vol.  142,  p.  393. 

2  Twelfth  Census,  Vol.  V,  p.  Ixxvii. 

16  241 


AGRICULTURAL    ECONOMICS 

this  could  happen  without  a  single  farmer  becom- 
ing bankrupt  and  losing  his  farm. 

The  decline  in  the  percentage  of  landowning 
farmers  is  due  largely  to  the  fact  that  a  decreas- 
ing percentage  of  the  succeeding  generations  of 
young  farmers  are  able  to  acquire  land.  This  is 
shown  in  the  following  table  : 

TABLE  10.    PERCENTAGE  OF  PERSONS  OWNING  AND  HIRING 
FARM  HoMES.1 

1890  igoo 

Owned          Hired  Owned          Hired 

Under  25  years 32.6  67.4  27.8  72.2 

25  to  34  years 49.8  50.2  45-3  54-7 

35  to  44  years 64.0  36.0  64.4  35.6 

45  to  54  years 72.3  27.7  70.7  29.3 

55  years  and  over 82.2  17.8  81.4  18.6 

This  table  indicates  that  nearly  three-fourths  of 
the  farmers  under  twenty-five  years  of  age  are 
tenants ;  that  the  percentage  of  tenant  farmers  de- 
clines, and  the  percentage  of  landowning  farmers 
increases,  as  we  pass  from  the  younger  to  the 
older  age  periods,  until  less  than  a  fifth  of  the 
farmers  who  are  fifty-five  years  of  age  and  over 
are  tenants. 

Statistics  of  this  kind  were  first  collected  in 
1890,  and  while  they  showed  the  status  at  that 
time  and  suggested  a  movement  from  tenancy  to 
landownership,  they  did  not  prove  the  existence 
of  such  a  movement.  By  comparing  the  figures 
for  1890  with  those  for  1900,  this  movement  is 

1  Twelfth  Census,  Vol.  II,  p.  ccxi. 
242 


TENANCY   AND   L AN D O W N ER S H  I  P 

clearly  shown.  The  occupiers  of  farm  homes, 
who  were  from  25  to  34  years  of  age  in  1890, 
were  from  35  to  44  in  1900.  By  comparing  these 
occupiers  at  the  two  dates,  we  find  an  increase  in 
the  percentage  of  home  owners,  from  49.8,  in 
1890,  to  64.4,  in  1900.  Of  the  farm-home  occu- 
piers belonging  to  the  age  period  from  35  to  44  in 
1890,  and  to  the  age  period  45  to  54,  in  1900,  64 
per  cent,  were  owners  at  the  earlier  date,  and  70.7 
per  cent,  at  the  latter. 

These  figures  indicate  a  constant  movement 
from  tenancy  to  landownership.  This,  however, 
is  a  commonplace  fact  recognized  by  all  who 
actually  observe  agrarian  movements.  This 
movement  is  necessary.  Young  farmers  start  in 
with  little  capital,  and  through  gifts,  inheritances, 
or  savings  from  their  profits,  they  gradually  ac- 
quire ownership.  But,  from  generation  to  gen- 
eration, a  smaller  percentage  of  the  farmers  are 
able  to  make  this  transition.  Notice  in  the  above 
table  that  of  the  occupiers  of  farm  homes  who 
were  less  than  25  years  of  age,  a  smaller  percen- 
tage were  owners  in  1900  than  in  1890.  This  is 
true  for  every  age  period  given  in  the  table  except 
one ;  the  reverse  being  true  for  the  period  from  35 
to  44.  This  suggests  that  the  decline  in  land- 
ownership  is  due  to  the  inability,  or  disinclina- 
tion of  the  succeeding  generation  to  acquire  land- 
ownership  so  generally  as  their  predecessors. 

If  we  wish  to  know  why  it  is  becoming  more 
243 


AGRICULTURAL    ECONOMICS 

and  more  difficult  for  a  farmer  to  acquire  the 
ownership  of  land,  we  must  study  those  forces  and 
conditions  which  enable  the  farmer  to  buy  land, 
and  also  the  conditions  which  retard  his  making 
investments  in  land.  If  we  wish  to  improve  the 
conditions  with  respect  to  the  ownership  of  farms, 
we  should  devise  some  means  of  improving  the 
farmer's  facilities  for  making  such  acquisitions. 

Section  II.  Land  values  and  land  ownership. — 
That  progress  in  society  which  results  in  a  rise  in 
land  values,  tends  to  make  it  more  difficult  to  buy 
a  farm  out  of  the  savings  from  personal  profits. 
This  may  be  given  as  an  important  factor  in 
bringing  about  the  decline  in  the  percentage  of 
landowning  farmers.  It  may  be  that  the  farmer 
will  be  able  to  save  a  larger  sum  of  money  each 
year,  and,  yet,  not  be  able  to  pay  for  a  farm  so 
readily  after  a  rise  in  land  values  as  before;  be- 
cause more  money  would  be  required  to  pay  for 
the  land.  If  the  rise  in  land  values  kept  pace  with 
the  rise  in  the  value  of  farm  produce,  and  no  more, 
so  that  the  profits  due  to  personal  ability  would 
rise  in  the  same  proportion  as  land  values,  the 
amount  of  time  required  for  saving  the  money 
with  which  to  buy  a  farm  would  remain  the  same. 
But  as  a  matter  of  fact  the  progress  which  makes 
a  demand  for  farm  products  at  an  increased  price 
is  usually  accompanied  by  an  increase  in  the  agri- 
cultural population,  and  hence  a  larger  number  of 
farmers  would  be  competing  for  the  use  of  the 
244 


TENANCY  AND   LAND 0 W N ERS H  I  P 

land,  so  that  a  larger  proportion  of  the  product  is 
credited  to  the  land,  and  while  the  efficient  farm- 
ers may  be  able  to  save  more  money  each  year 
than  formerly,  their  savings  will  not  increase 
so  rapidly  as  will  the  annual  value  of  the  land. 
More  time  will  be  required,  therefore,  to  save  the 
amount  necessary  to  pay  for  a  farm  of  a  given 
size.  Hence,  with  the  progress  which  brings  con- 
tinually rising  land  values,  a  smaller  percentage 
of  each  generation  of  farmers  will  be  able  to  ac- 
quire the  ownership  of  land,  and  this  will  result  in 
a  gradual  decline  in  the  percentage  of  landowning 
farmers. 

A  great  and  unexpected  change  in  prices  has  a 
marked  influence  upon  the  farmer  who  is  paying 
off  the  mortgage  on  his  farm.  A  rise  in  prices 
enables  him  to  pay  off  the  mortgage  in  a  much 
shorter  time  than  if  prices  had  remained  the  same 
as  when  the  debt  was  contracted.  A  fall  in  prices 
makes  it  very  difficult  to  pay  a  debt.  The  returns 
from  the  land  fall  below  the  amount  that  was  ex- 
pected when  the  debt  was  contracted  and  a  larger 
share  of  the  gross  returns  of  the  farm  is  required 
to  pay  the  interest  and  a  smaller  surplus  is  left, 
which  may  be  used  in  paying  off  the  mortgage. 
When  the  price  of  wheat  went  down,  about  thirty 
years  ago  the  price  of  land  in  England,  and  in 
parts  of  the  United  States,  went  down  more  than 
half.  Farmers  who  had  purchased  land  and  given 
mortgages  often  found  their  farms  worth  no 
245 


AGRICULTURAL    ECONOMICS 

more,  and  sometimes  even  less  than  the  face  of 
the  mortgage.  To  pay  the  interest  was  a  great 
burden,  and  many  farmers  were  forced  to  sell, 
often  for  little  more  than  enough  to  pay  the  mort- 
gages. Thus  it  is  seen  that  while  the  ultimate 
result  of  rising  prices  is  to  make  it  harder  to 
acquire  landownership,  the  immediate  result  may 
be  the  opposite,  and  again,  that  while  cheap  land 
is  conducive  to  landownership,  the  immediate 
effect  of  a  lowering  of  land  values  is  to  reduce 
many  landowning  farmers,  who  have  encumbered 
their  lands  with  mortgages  as  a  means  of  buying 
land,  to  the  ranks  of  the  tenant  class. 

In  the  northern  states  there  seems  to  be  some 
relation  at  the  present  time,  between  the  value  of 
farms  and  the  percentage  of  tenancy.  This  rela- 
tion is  shown  in  the  following  table  which  gives 
the  average  value  per  farm  (of  farm  land  and 
improvements,  including  buildings),  and  the  per- 
centages of  tenancy,  in  the  North  Atlantic  and 
North  Central  divisions : 

TABLE  n.    THE  VALUE  OF  FARMS  AND  THE  PERCENTAGE  OF 

TENANCY  IN  THE  NORTHERN  DIVISIONS 

AND  STATES,  IN  igoo.1 

Geographical  Divisions  Percentage  Average  Value 

and  States  of  Tenancy  of  Farms 

North  Atlantic 20.8  $3,656 

New  Jersey 29.9  4,693 

Pennsylvania 26.0  4,006 

New  York 23.9  3,917 

1  Twelfth  Census,  Vol.  V,  Tables  5  and  12. 
246 


TENANCY   AND   L AN D O W N ER SHI  P 

Geographical  Divisions  Percentage  Average  Value 

and  States  of  Tenancy  of  Farms 

Rhode  Island 20.1  4,206 

Vermont 14.5  2,509 

Connecticut 12.8  3, 615 

Massachusetts 9.6  4,190 

New  Hampshire 7.5  2,391 

Maine 4.7  1,627 

North  Central 27.9  4,354 

Illinois 39.3  6,683 

Nebraska 36.9  4,746 

Kansas 35.2  3,7l8 

Iowa 34.9  6,550 

Missouri 30.5  2,962 

Indiana 28.6  3,793 

Ohio 27.5  3,746 

South  Dakota 21.8  4,184 

Minnesota 17.3  4,329 

Michigan 15.9  2,966 

Wisconsin 13.5  4,042 

North  Dakota 8.5  4,385 

From  the  above  table  it  will  be  seen  that,  in  the 
North  Atlantic  division,  the  state  in  which  the 
average  value  of  farms  is  highest  is  also  the  state 
in  which  the  percentage  of  tenancy  is  highest,  and 
that  the  state  which  shows  the  lowest  farm  values, 
shows,  also,  the  lowest  percentage  of  tenancy. 
Yet,  when  the  division  as  a  whole  is  considered, 
the  relation  between  farm  values  and  the  percen- 
tage of  tenancy  becomes  very  much  confused.  It 
is  hard  to  understand  why  the  percentage  of  ten- 
ancy is  so  low  in  Massachusetts,  for  example, 
where  land  values  are  relatively  high. 

When  the  North  Atlantic  division  is  compared 
247 


AGRICULTURAL    ECONOMICS 

with  the  North  Central  division,  the  relation  be- 
tween farm  values  and  tenancy  seems  to  sustain 
the  general  proposition  that  a  higher  percentage 
of  tenancy  is  generally  associated  with  high  land 
values  than  with  low  land  values.  It  is  also  true 
that  the  state  with  the  highest  average  farm  values 
in  the  North  Central  division  is  the  one  with  the 
highest  percentage  of  tenancy.  When  the  four 
states  which  lie  in  the  heart  of  the  corn  belt,  Illi- 
nois, Iowa,  Indiana,  and  Ohio,  are  compared,  the 
same  relation  holds  true ;  but  other  states  such  as 
Missouri  and  North  Dakota  seem  to  throw  this 
relation  into  confusion.  And  when  the  new 
states,  Kansas  and  Nebraska,  are  compared  with 
an  old  state  like  Massachusetts  the  influence  of  the 
more  recent  supply  of  government  land  in  the 
new  states  seems  to  be  much  more  than  counter- 
balanced by  some  other  forces. 

By  comparing  the  northern  part  of  Wisconsin 
with  the  southern  part  of  that  state,  the  two  fac- 
tors of  low  land  values  and  recent  settlement  are 
brought  into  comparison  with  high  land  values 
and  longer  established  settlements.  While  the 
average  percentage  of  tenancy  in  the  state  of  Wis- 
consin seems  very  low  (13.5  per  cent.),  espe- 
cially in  comparison  with  that  of  the  state  of  Illi- 
nois (39.3  per  cent.),  it  will  be  found  upon  analy- 
sis that  this  low  average  for  the  state  is  due,  in 
a  large  degree,  to  the  extremely  low  percentages 
of  tenancy  in  the  northern  counties,  where  there 
248 


TENANCY   AND   L AND O W N ERSH  I  P 


is  much  cheap  and  unoccupied  land.  There  are 
eighteen  counties  in  the  northern  part  of  the  state 
in  which  the  percentage  of  tenancy  is  below  five. 
These  counties,  with  their  farm  values  and  per- 
centages of  tenancy  are  given  in  the  following 
table : 

TABLE  12.    THE  RELATION  BETWEEN  TENANCY  AND  LAND 
VALUES  IN  THE  NORTHERN  COUNTIES  OF  WISCONSIN. 


Number  of 
Farms  in 

Counties.  the  County. 

Burnett 1,198 

Iron 83 

Price., 885 

Taylor 1,168 

Shawano 3,140 

Kewaunee 2,193 

Lincoln 924 

Marathon 4,376 

Florence 191 

Marinette 1,300 

Manitowoc....  4,073 

Door 2,209 

Oconto 2,241 

Washburn 449 

Ashland 489 

Vilas 83 

Bayfield 465 

Oneida 350 


While  the  percentage  of  tenancy  is  low  in  the 
northern  part  of  Wisconsin  it  is  relatively  high  in 
the  southern  part.  The  fourteen  counties  which 
showed  the  highest  percentage  of  tenancy,  in 
1900,  form  a  solid  block  in  the  southern  part  of 
249 


Percentage 
Operated  by 
Tenants. 

Average  Value 
of  Farms  and 
Improvements 

I.I 

1,029 

1.2 

1.7 

1.8 

2.2 

1,459 
i,or6 

1,345 
2,376 

2.4 

2,920 

2.4 

3-1 

1,494 
1,961 

3-2 

1,202 

3-5 
3-8 

1,754 
4,304 

4.0 

2,231 

4.0 

4.2 
4-5 
4-8 

2,114 
1,169 
1,645 
1,411 

4.9 

1,025 

4.9 

1,112 

AGRICULTURAL    ECONOMICS 

the  state.     These  counties  are  given  in  the  follow- 
ing table : 

TABLE  13.    TENANCY  AND  LAND  VALUES  IN  THE  SOUTH- 
ERN COUNTIES  OF  WISCONSIN. 

Number  of  Percentage  Average  Value 

Farms  in  Operated  by  of  Farms  and 

Counties  County  Tenants  Improvements 

Rock 3,829  35.4  6,769 

Milwaukee...  2,576  31.2  10,342 

Walworth 2,754  29.7  7,703 

Kenosha 1,298  29.1  7,387 

Lafayette 2,501  27.6  6,610 

Green 2,540  26.4  6,589 

Dane 6,346  26.2  6,125 

Racine 2,118  24.8  6,478 

Columbia 3,439  24.0  5,208 

Grant 4,219  20.7  5,106 

Waukeshaw..  3,549  20.0  6,595 

Iowa 2,547  18.9  5,319 

Jefferson 3,453  18.2  6,365 

Dodge 4,994  18.1  7,313 

These  tables  show  clearly  that,  in  general,  the 
percentage  of  tenancy  is  high,  in  the  state  of  Wis- 
consin, in  the  districts  which  have  been  longest 
settled  and  where  land  values  are  relatively  high. 
And  yet,  there  are  here,  as  in  the  other  compari- 
sons, many  exceptions  to  the  general  rule;  and 
this  makes  it  necessary  to  emphasize  the  fact  that 
many  forces  are  operating  together  in  bringing 
about  the  condition  with  respect  to  landownership 
and  tenancy. 

Section  III.  Landownership  and  tenancy 
among  the  negroes. — In  the  southern  states  where 
the  percentage  of  tenancy  is  high,  in  comparison 
250 


TENANCY   AND   L AND O WN ERS H  I  P 

with  that  of  the  northern  states,  the  value  of  land 
is  relatively  low.  Other  factors  have  evidently 
had  more  to  do  in  determining  the  situation  here 
than  the  influence  of  land  values.  The  average 
value  of  farms  is  $4,354  in  the  North  Central  di- 
vision, while  it  is  only  $1,628  in  the  South  Cen- 
tral division,  whereas  the  percentage  of  tenancy  is 
48.6  in  the  latter  and  only  27.9  in  the  former  divi- 
sion. The  negro  seems  to  be  an  important  factor 
in  the  problem  of  tenancy  and  landownership  in 
the  southern  states.  In  the  following  table  is 
given  the  percentage  of  all  farms,  which  are  occu- 
pied by  tenants;  the  percentage  of  all  farms  op- 
erated by  white  farmers,  which  are  occupied  by 
tenants;  the  percentage  of  all  farms  operated  by 
negro  farmers,  which  are  operated  by  tenants ;  and 
the  average  value  per  farm  of  all  farm  land  and 
improvements : 

TABLE  14.    TENANCY  AND  LAND  VALUES  IN  THE  SOUTH- 
ERN STATES.1 


Divisions 
and 
States 

Percentage 
of  all 
Farms 
which  are 
operated 
by  Tenants 

Percentage 
of  Farms 
operated 
by  White 
Farmers, 
which  are 
rented 

Percentage 
of  Farms 
operated 
by  Negro 
Farmers, 
which  are 
rented 

Average 
value 
of  all 
Farms 

South  Central.. 

48.6 

37-8 

77-4 

ll,250 

South  Atlantic  . 

44-3 

33-1 

70.2 

1,254 

Georgia 

en  Q 

44.8 

86.0 

8l5 

oy.y 
57.7 

£ft'<~> 

37.  Q 

84.9 

603 

Mississippi  

O/  •  ' 

62.4 

O/    ;7 

72.  Q 

83.6 

688 

Louisiana.  . 

WW««f 

57.0 

O     '^ 

32.1 

83.8 

1,217 

1  Twelfth  Census,  Vol.  V,  Tables  5,  6  and  7. 
251 


AGRICULTURAL    ECONOMICS 

From  the  above  table  it  will  be  seen  that  the 
situation  in  the  South  can  be  explained,  in  part 
at  least,  in  terms  of  the  negro  population.  It  is 
relatively  a  short  time  since  the  freedmen  started 
with  nothing,  and  the  fact  that  a  small  percentage 
of  them,  even,  now  own  the  land  which  they  culti- 
vate is  in  itself  an  encouraging  fact.  In  the  South 
Central  division  26.8  per  cent,  of  all  farms  are 
operated  by  negroes,  and  while  the  percentage  of 
tenancy  for  all  farmers  in  this  division  is  48.6 
that  for  the  negro  farmers  is  78.5.  In  Alabama, 
where  42.  i  per  cent,  of  the  farms  are  operated  by 
negroes,  the  percentage  of  tenancy  for  all  farms 
was  57.7,  while  that  among  negro  farmers  was 
84.9  and  that  among  white  farmers  was  37.9.  In 
Mississippi,  where  62.4  per  cent,  of  all  farms 
were  operated  by  tenants,  83.6  of  the  negro  farm- 
ers were  tenants,  while  only  32.9  per  cent,  of  the 
white  farmers  were  tenants. 

In  Adams  county,  Mississippi,  where  92.4  of 
all  farmers  are  negroes,  the  percentage  of  tenancy 
is  87.9,  whereas  in  Hancock  county,  where  91.7 
of  all  farmers  are  whites,  only  8.5  per  cent,  of  the 
farms  are  operated  by  tenants.  Again,  Issaquena 
county,  where  95.7  per  cent,  of  all  farmers  are 
negroes,  90.3  of  all  farms  are  operated  by  tenants. 
This  is  sufficient  to  illustrate  the  general  principle 
that  where  the  negro  farmers  are  very  numerous 
the  percentage  of  tenancy  runs  higher  than  where 
the  white  population  dominates.  Both  the  white 
252 


TENANCY  AND   L AN D O WN ERSHI  P 

and  the  negro  farmers  are  more  commonly  tenants 
where  the  negroes  are  most  numerous.  In  the 
states  containing  the  black  belt  the  percentage 
of  tenancy  among  the  negroes  is  relatively  high. 

The  present  situation  with  respect  to  tenancy 
and  landownership  among  the  negro  farmers,  is 
described  in  a  recent  census  bulletin  in  the  follow- 
ing terms  :*  "Present  conditions  in  the  farm  life 
of  the  southern  negro  can  be  understood  only  by 
bringing  to  mind  the  historic  development.  Be- 
fore the  war  the  southern  plantation  consisted  of 
the  owner,  from  20  to  200  slaves,  and  several 
hundred  acres  of  land.  .  .  .  One  of  the  most  strik- 
ing features  in  connection  with  plantations  such 
as  these  is  their  large  area.  .  .  .  Between  1850  and 
1860  the  average  size  of  the  plantations  in  the 
cotton  growing  South  increased  from  427  to  431 
acres;  leaving  out  Texas,  whose  ranches  in  1850 
were  not  really  farms,  the  increase  was  from  353 
to  408  acres,  or  15.7  per  cent/' 

"The  situation  of  the  farming  population  in 
the  black  belt  to-day  shows  four  well  defined  eco- 
nomic classes.  There  is  the  farm  laborer  who 
receives  for  his  work,  at  the  end  of  the  year,  cer- 
tain fixed  wages,  varying  from  $30  to  $60. 
Some  receive  also  a  house,  perhaps  with  a  garden 
spot,  and  have  their  supplies  of  food  and  clothing 
advanced ;  in  such  cases  the  supplies  must  be  paid 

1  Negroes  in  the  United  States,  Bulletin  8,  Bureau  of  the 
Census,  pp.  78  to  82. 

253 


AGRICULTURAL    ECONOMICS 

for,  with  interest,  out  of  the  money  wages.  An- 
other class  of  laborers  are  contract  hands — i.  e., 
laborers  paid  by  the  month  or  year  and  fed  and 
supplied  by  the  landowner.  Such  laborers  receive 
from  30  to  40  cents  per  day  during  the  working 
season ;  they  .are  usually  unmarried  persons,  many 
being  women,  and  when  they  marry  they  become 
metayers,  or  occasionally,  renters. 

"The  cropper  is  entirely  without  capital,  even 
in  the  limited  sense  of  food  or  money  to  keep  him 
from  seed  time  to  harvest;  all  he  furnishes  is 
labor,  while  the  landowner  furnishes  house,  land, 
stock,  tools,  and  seed.  At  the  end  of  the  year 
the  cropper  gets  a  stipulated  portion  of  the  crop ; 
out  of  his  share,  however,  comes  payment,  with 
interest,  for  food  and  clothing  advanced  him  dur- 
ing the  year.  Thus  we  have  a  laborer  without 
capital  and  without  wages,  and  an  employer 
whose  capital  consists  largely  of  food  and  other 
supplies  advanced  to  laborers  —  an  arrangement 
unsatisfactory  to  both  parties,  and  in  vogue  usu- 
ally on  poor  land  with  hard  pressed  owners. 

"Above  the  cropper  comes  the  share  tenant  who 
works  the  land  on  his  own  responsibility,  paying 
rent  in  cotton,  and  supported  by  the  crop  lien  sys- 
tem. The  great  mass  of  the  negro  population  is 
found  in  this  class.  After  the  war  this  plan  at- 
tracted the  freedmen  on  account  of  its  larger 
freedom  and  its  possibility  for  making  a  surplus. 
If  the  rent  fixed  was  reasonable,  this  was  an  incen- 
254 


TENANCY  AND  LANDOWNERS HIP 

tive  to  the  tenant  to  strive;  on  the  other  hand, 
if  the  rent  was  too  high  or  if  the  land  deteriorated, 
the  result  was  to  discourage  and  to  check  the 
efforts  of  the  tenant. 

"The  renter  for  a  fixed  money  rental  belongs  in 
the  highest  of  the  emerging  classes.  The  advan- 
tages possessed  by  this  class  are  their  freedom  to 
choose  their  crops  and  the  increased  responsibility 
which  comes  through  having  money  transactions. 
While  some  of  the  renters  differ  little  in  condition 
from  the  metayers,  yet  on  the  whole,  they  are  a 
more  intelligent  and  responsible  class  and  are  the 
ones  who  eventually  become  landowners." 

As  to  the  distribution  of  the  landowning  negro 
farmers  and  the  conditions  which  have  been  con- 
ducive to  the  acquiring  of  landownership  on  the 
part  of  the  freedmen  the  following  may  be  quoted 
from  the  same  source  as  the  above :  "In  the  states 
along  the  northern  border  of  the  South,  ....  the 
per  cent,  of  owned  farms  among  negro  farmers  is 
comparatively  high,  varying  from  40.5  in  Dela- 
ware to  72  per  cent,  in  West  Virginia.  In 
Georgia,  Alabama,  Mississippi,  and  Louisiana  the 
percentage  is  very  low,  ranging  from  13.7  per 
cent,  in  Georgia;  to  16.3  per  cent,  in  Mississippi; 
in  South  Carolina  the  percentage  is  somewhat 
higher  (22.2)  but  is  still  below  the  average  for 
the  country.  These  five  states  are  in  the  heart  of 
the  South;  they  comprise  the  greater  part  of  the 
black  belt ;  in  each  of  them  negroes  form  between 
255 


AGRICULTURAL    ECONOMICS 

45  and  60  per  cent,  of  the  total  population,  and 
negro  farmers  between  35  and  60  per  cent,  of  all 
farmers.  Collectively  they  contain  almost  one- 
half  (47.5)  of  the  total  negro  population  of  the 
United  States." 

"In  states  where  negroes  are  relatively  less  nu- 
merous the  percentage  of  ownership  is  higher. 
This  suggests  the  inference  that  where  the  negroes 
are  massed,  tenancy  is  the  prevailing  form  of  farm 
tenure;  but  it  is  not  so  clear  that  we  have  here  a 
direct  relation  of  cause  and  effect.  These  states 
are  all  cotton  growing  states.  The  massing  of 
negroes,  tenant  farming  and  cotton  culture  appear 
to  be  correlated  facts,  the  first  resulting  from  the 
last,  and  the  second  and  the  last  acting  as  recipro- 
cal cause  and  effect  to  the  crop  lien  system.  In 
Florida,  which  has  a  percentage  of  negro  popula- 
tion (43.7)  almost  as  high  as  that  of  Georgia 
(46.7)  the  percentage  of  ownership  among  col- 
ored farmers  is  high  (48.4)  because  of  the  greater 
ease  of  acquiring  fertile  land  in  a  newly  settled 
state.  For  the  same  reason,  in  Texas,  where  nine- 
tenths  of  the  negro  farmers  make  cotton  their 
principal  crop,  the  percentage  of  ownership  (30.7) 
though  not  high,  is  above  the  average  for  the 
country." 

In  South  Carolina  the  government  lands  were 

sold   on    favorable   terms.      In    North    Carolina 

there  was  a  thrifty  free  negro  element.     Virginia 

"had  developed  slavery  furthest  and  brought  a 

256 


TENANCY   AND   LAND OWN ERSHI  P 

larger  body  of  negroes  to  a  considerable  degree  of 
culture  and  civilization  before  1861  than  had  any 
other  state.  It  also  bore  the  main  brunt  of  the 
war,  and  the  breaking  up  of  estates  gave  the 
negroes  a  chance  to  buy."  Hence  it  will  be  seen 
that  such  considerations  as  government  lands, 
efficiency  of  the  farmers,  etc.,  are  important  fac- 
tors in  determining  the  percentage  of  tenancy 
among  the  negroes  as  well  as  among  the  white 
farmers. 

Section  IV.  The  Ownership  of  rented  farms. 
— The  ownership  of  these  rented  farms  is  not  con- 
centrated in  the  hands  of  a  few  wealthy  persons  as 
is  the  case  in  England,  but  is  widely  distributed. 
In  collecting  the  data  for  the  Census  of  1900,  an 
attempt  was  made  to  ascertain  the  names  and  resi- 
dence of  the  owners  of  rented  farms.  As  a  result 
of  this  inquiry,  the  residence  of  the  owners  of 
95.6  per  cent,  of  all  farms  in  the  United  States 
(exclusive  of  Alaska  and  Hawaii)  were  reported. 

"Of  the  1,934,346  farms  in  the  United  States 
for  which  the  names  and  post-office  addresses  of 
the  owners  were  reported,  the  owners  of  1,523,- 
863,  or  78.8  per  cent,  resided  in  the  same  county 
in  which  their  farms  were  located;  307,656,  or 
15.9  per  cent.,  in  the  same  state  but  not  in  the 
same  county;  102,827,  or  5.3  per  cent.,  outside  of 
the  state;  [and  1,097,  or  -OS1  Per  cent>  in  foreign 
countries] .  Many  residing  in  the  same  state,  but 
17  257 


AGRICULTURAL    ECONOMICS 

not  in  the  same  county,  had  homes  very  near 
their  rented  farms.  This  was  notably  the  case 
with  farms  located  near  county  lines.  Such 
owners  can  hardly  be  classed  as  non-residents, 
and  the  very  small  per  cent,  of  rented  farms 
owned  by  non-resident  landlords  would  have  been 
still  further  reduced  if  it  had  been  practicable  to 
exclude  such  owners. 

"The  Western  division  had  the  smallest  pro- 
portion of  rented  farms  whose  owners  resided  in 
the  county  where  their  rented  farms  were  located. 
....  The  South  Central  and  South  Atlantic  divi- 
sions had  the  largest  proportion  of  owners  resid- 
ing in  the  county  where  their  rented  farms  were 
located.  .  .  .  The  North  Central  division  had  the 
largest,  and  the  Western  the  next  largest,  propor- 
tion of  rented  farms  with  owners  residing  outside 
of  the  state."1 

Eighty  per  cent,  of  the  owners  of  rented  farms 
in  the  United  States  owned  but  one  rented  farm 
each,  and  fifty-two  per  cent  of  the  rented  farms 
were  owned  by  persons  who  owned  but  one  rented 
farm.  The  situation  in  this  regard  is  made  clear 
by  the  following  tables,  which  show  the  per  cent, 
of  the  number  of  rented  farms  and  of  the  number 
of  owners  of  rented  farms  classified  by  the  number 
of  farms  owned  by  one  person  :2 

twelfth  Census  of  the  United  States,  1900,  Vol.  V,  p. 
Ixxxvii. 

2  Ibid.,  p.  Ixxxviii. 

258 


TENANCY   AND   L AND O W N ER S H  I  P 

PER  CENT.  OF  THE  NUMBER  OF  RENTED  FARMS  CLASSIFIED 
BY  NUMBER  OF  FARMS  OWNED  BY  ONE  PERSON 

Geographic  3  ajld       5  a,nd    I0 

nSBrtass.  *•  *a-  ;l:  ; 

The  United  States    52.0      14.8      n.6        9.7        6.0       5.9 


North  Atlantic... 

82.0 

9 

•7 

3 

.6 

2 

.2 

i. 

0 

i 

•5 

North  Central  

73-7 

13 

•7 

6 

•9 

3 

•7 

I. 

2 

0 

.8 

South  Atlantic  .  .  . 

39-3 

17 

•4 

16 

.1 

14 

•3 

7- 

8 

S 

.1 

South  Central  

35-8 

15 

•4 

14 

•5 

13 

•4 

9- 

7 

ii 

.2 

Western  

76.6 

10 

.0 

c 

.7 

7 

.7 

2. 

7 

2 

.1 

Alaska  and  Hawaii 

j\j*\j 

91.7 

5 

.0 

O 

3 

•  O 

•3 

O 

•  / 

O 

Foreign  Countries 

63.7 

8 

•7 

7 

•  7 

4 

•3 

7- 

7 

7 

•9 

PERCENTAGE  OF  THE  NUMBER  OF  OWNERS  OF  RENTED  FARMS 

CLASSIFIED  BY  NUMBER  OF  FARMS  OWNED 

BY  ONE  PERSON 

3  and       5  and     10  and        20 
d  d  d       Farma 


The  United  States    80.0      11.4        5.4        2.3        0.7        0.2 


North  Atlantic... 

92.8 

5-5 

1-3 

0.3 

0  I 

O.O 

North  Central.... 

88.4 

8.2 

2.6 

0.7 

O.I 

0.0 

South  Atlantic  .  .  . 

70.4 

15-5 

8.6 

4-1 

i.i 

0.3 

South  Central  .... 

70-3 

15-1 

8.6 

3-9 

i.S 

0.6 

Western 

01.  1 

c.o 

I.O 

0.8 

0.2 

O.I 

Alaska  and  Hawaii 

27  x  *  x 

96.5 

O  *:? 

2.6 

*  *:7 

0.9 

Foreign  Countries 

88.6 

6.1 

3-0 

I.O 

0.9 

0.4 

It  will  be  noted  that  the  ownership  of  rented 
farms  is  more  concentrated  in  the  southern  states 
than  in  other  parts  of  the  United  States.  This  is 
explained  in  the  census  report  as  follows :  "Orig- 
inally, great  areas  of  land  in  the  South  were  held 
in  large  plantations  and  operated  by  slave  labor. 
After  emancipation  that  form  of  labor  was  super- 
259 


AGRICULTURAL    ECONOMICS 

seded  by  some  form  of  contract  leasehold,  by 
which  the  former  slaves  or  wage  laborers  were 
given  charge  of  ....  small  tracts  of  land,  upon 
which  they  were  to  raise  crops." 

Thus  we  find  that  while  more  than  a  third  of 
the  farmers  of  the  United  States  hire  the  land 
which  they  cultivate,  these  hired  farms  are  so  gen- 
erally held  by  men  who  live  near  by,  that  the  rela- 
tion of  landlord  and  tenant  is  generally  a  personal 
one,  and  the  problems  of  absenteeism  and  of  con- 
centration of  ownership  which  have  been  so  per- 
plexing in  certain  other  countries  have  as  yet  been 
of  little  significance  in  the  United  States.  Never- 
theless the  statistics  for  the  last  twenty  years  show 
a  significant  increase  in  tenancy,  and  it  is  to  be 
expected  that  the  men  who  have  made  fortunes  in 
the  great  industries  of  the  cities  will  eventually 
invest  some  of  their  savings  in  landed  estates,  and 
in  this  way  bring  forward  problems  from  which 
we  have  hitherto  been  comparatively  free. 

Section  V .  The  relations  between  landlords 
and  tenants  in  the  United  States. — Thirty-five  and 
three-tenths  per  cent,  of  all  the  farms  in  the 
United  States,  exclusive  of  Alaska  and  the  insular 
possessions,  were  occupied  by  tenant  farmers  in 
1900.  In  all  2,024,964  farms  were  operated  by 
this  class  of  farmers.  Of  these,  1,273,299  or  62.8 
per  cent,  were  operated  by  share  tenants  and  751,- 
665  or  37.2  per  cent,  by  cash  tenants.  A  farm 
was  said  to  be  operated  by  a  cash  tenant  if  culti- 
260 


TENANCY  AND   L AND O WN ERS H  I  P 

vated  by  a  tenant  who  paid  "a  fixed  rental  in 
money,  or  a  stated  amount  of  labor  or  farm  com- 
modities/' and  by  a  share  tenant  if  operated  by  a 
tenant  who  paid  "for  its  use  a  share  (as  one-third, 
or  one-half  or  other  proportion)  of  crops  raised."1 

Share  tenancy. — Share  tenancy  is  preferred  by 
many  tenant  farmers  because  the  risk  is  less.  The 
thought  of  paying  a  fixed  rent  whether  the  crop 
is  large  or  small  and  whether  the  prices  are  high 
or  low  is  not  attractive  to  the  majority.  And 
again,  many  of  the  tenants  do  not  possess  suf- 
ficient wealth  to  enable  them  to  own  all  of  the 
stock  necessary  to  operate  a  farm  on  a  cash  basis. 

The  landlords  who  live  in  close  proximity  to 
the  land  which  they  let,  and  who  have  time  to 
devote  to  its  supervision,  usually  prefer  a  share  of 
the  crop  because  they  find  it  more  profitable  to 
them.  The  share  system  is  more  profitable  to 
the  landlords  largely  because  of  the  close  super- 
vision which  they  give  to  the  farms  let  on  shares. 
Many  of  the  tenants  are  young  and  inexperienced, 
and  are  willing  to  leave  the  general  management 
of  the  farm  to  the  landlord,  who  is  very  likely  to 
be  an  elderly  farmer,  and  the  fact  that  he  has  a 
farm  to  let  suggests  that  he  has  been  a  successful 
farmer.  All  tenants  are  not  so  willing  to  be  di- 
rected by  their  landlords,  but  if  they  pay  a  share 
of  the  products  as  rent  the  landlord's  right  to  give 
advice  is  apparent,  whereas,  if  cash  is  paid  there 

1  Twelfth  Census,  Vol.  V,  p.  759. 
261 


AGRICULTURAL    ECONOMICS 

seems  to  be  no  good  reason  why  the  tenant  should 
not  do  as  he  likes.  The  principle  being  estab- 
lished that  the  landlord  has  a  right  to  direct  more 
or  less  definitely  the  operations  of  the  farm,  as 
in  the  case  o'f  share  tenancy,  the  landlord  has  little 
difficulty  in  so  directing  the  management  of  the 
farm  as  to  preserve  the  fertility  of  the  land.  The 
choice  of  crops,  and  the  organization  of  the  field- 
system  are  subjects  which  the  share  tenant  is  usu- 
ally willing  to  leave  to  the  landlord,  and  in  many 
cases  the  landlord  controls  the  field  operations  in 
the  minutest  detail.  For  example,  the  depth  to 
which  land  is  to  be  plowed,  the  time  of  sowing, 
planting,  harvesting,  etc. ;  the  number  of  times  a 
field  of  Indian  corn  should  be  cultivated,  etc.,  are 
details  to  which  the  landlord  often  gives  his  atten- 
tion under  this  system  of  letting  land.  The  land- 
lord is  willing  to  exert  himself  for  these  purposes 
because  his  profits  are  increased  by  such  activity. 
Another  reason  often  given  by  landlords  for 
preferring  a  share  of  the  crop  to  a  cash  rent,  is 
that,  in  a  country  where  most  of  the  tenants  have 
little  wealth,  a  share  of  the  product  proves  more 
profitable  to  the  landlord,  in  the  long  run,  because 
he  shares  the  benefit  of  an  extra  large  crop  and 
gets  something  out  of  the  smallest  one,  whereas  in 
case  he  is  receiving  a  fixed  rent,  the  tenant  gets 
all  the  advantage  of  an  extra  large  crop,  but  in 
case  of  a  crop  failure  the  tenant  is  often  unable 
to  pay  the  fixed  rent  and  the  landlord  has  to  stand 
262 


TENANCY   AND   L AND O W N ER S H  I  P 

the  losses  when  the  crops  are  short  without  get- 
ting the  advantage  of  the  extra  large  crops. 
Where  the  tenants  are  men  of  considerable  wealth 
this  is  a  matter  of  less  importance. 

Again,  it  is  said  that  the  collection  of  the  rent  is 
an  easier  matter  where  a  share  of  the  crop  is  given. 
"Farmers  will  give  a  fifty  cent  chicken  for  a 
church  dinner  when  they  would  not  think  of  giv- 
ing as  much  as  twenty-five  cents  in  cash,"  says  an 
Iowa  farmer  who  has  tried  both  systems,  and  he 
continues,  "They  will  give  the  landlord  his  share 
of  the  farm  products  much  more  cheerfully  than 
pay  him  cash." 

The  share  rent  adjusts  itself  to  changes  in  the 
value  of  the  products  without  any  change  in  the 
contract.  This  is  looked  upon  by  some  farmers 
and  landlords  as  a  reason  of  first  importance  for 
adhering  to  the  share  system. 

Participation  of  the  landlord  in  the  manage- 
ment of  the  farm,  is  the  chief  reason  for  the  suc- 
cess of  share  tenancy  in  this  country.  This  point 
has  been  emphasized  over  and  over  again  in  the 
communications  received  from  men  who  are  in  a 
position  to  know.  Share  tenancy  is,  as  a  rule, 
more  profitable  to  the  landlord  only  when  the  farm 
is  under  his  immediate  supervision.  If  the  man- 
agement must  be  left  entirely  to  the  tenant  farmer 
the  cash  system  is  usually  preferable  to  the  land- 
lord. If  the  tenant  is  a  capable  manager,  so  that 
the  supervision  of  the  landlord  adds  nothing  to 
263 


AGRICULTURAL    ECONOMICS 

the  product,  then  it  is  better  for  the  tenant  to  pay 
a  fixed  rent  and  secure  the  extra  profits  due  to  his 
superior  ability. 

The  methods  of  letting  land  for  a  share  of  the 
products  are  so  very  numerous  that  to  describe 
all  the  forms  of  share  tenancy  is  practically  im- 
possible. In  this  connection  we  shall  attempt 
no  more,  therefore,  than  to  outline  briefly  some  of 
the  methods  in  common  use  in  the  North  Central 
states. 

Perhaps  the  simplest  form  of  share  tenancy 
arises  where  one  farmer  has  more  land  than  he 
cares  to  cultivate  while  some  of  his  neighbors  have 
less  than  they  wish  to  cultivate.  This  leads  to  a 
form  of  share  tenancy  in  which  persons  living  on 
their  own  farms  and  in  their  own  houses  simply 
enter  the  fields  of  the  landlord  to  grow  a  crop  of 
grain  or  to  make  hay  on  shares.  The  usual 
method  is  for  the  tenants  to  furnish  seed,  teams, 
tools  and  machinery.  In  some  cases  the  bill  for 
binding  twine  and  the  threshing  bill  are  paid  en- 
tirely by  the  tenant  and  sometimes  these  bills  are 
divided  between  landlord  and  tenant  in  the  same 
proportion  in  which  the  grain  is  shared.  The 
landlord's  share  of  the  crop  varies  in  different 
parts  of  the  country  from  one-third  to  one-half  of 
the  grain,  to  be  put  into  the  landlord's  bin  or 
delivered  at  the  market.  When  meadows  are  let 
in  this  way  one-half  or  more  of  the  hay  is  deliv- 
ered to  the  landlord  in  the  mow  or  in  the  stack. 
264 


TENANCY   AND   L AND O WN ER S H  I  P 

Under  this  system,  the  landlord  has  absolute  con- 
trol of  the  kinds  of  crops  to  be  grown  and  of  the 
system  of  crop  rotation.  The  land  is  usually  let 
for  but  one  year.  A  serious  objection  to  this 
system  of  letting  land  is  the  fact  that  a  large  share 
of  the  product  is  taken  from  the  land  and  sold  or 
fed  out  on  another  man's  land. 

The  share  system  becomes  somewhat  more  com- 
plex when  the  landlord  furnishes  a  house  and  barn 
and  garden-patch  for  the  tenant.  If  the  tenant 
desires  to  keep  but  little  live  stock,  let  us  say  a 
team,  a  cow,  a  few  hogs,  and  some  poultry,  his 
living  upon  the  place  will  not  make  a  great  differ- 
ence in  the  system ;  but  if  he  desires  to  keep  suffi- 
cient live  stock  to  consume  his  share  of  the  crop, 
and  especially  if  he  wishes  to  keep  cattle,  the  sys- 
tem becomes  more  complicated.  The  tenant's  de- 
mand for  pasture  land  is  often  met  by  leasing  to 
him  for  a  cash  rent,  a  certain  amount  of  land  to 
be  used  for  grazing  purposes.  The  feeding  of 
the  crop  on  the  farm  is  an  important  advantage  of 
this  method  of  letting  land.  In  tenancies  of  this 
description,  the  contracts  are  most  commonly 
drawn  for  but  one  year  with  the  understanding 
that  a  satisfactory  tenant  may  renew  his  contract 
indefinitely.1 

In  the  United  States,  tenant  farmers  are  largely 
young  men,  however,  who  do  not  as  a  class  pos- 
sess a  great  amount  of  wealth  which  can  be  in- 

1  See  Appendix  A  at  the  end  of  this  chapter. 
265 


AGRICULTURAL    ECONOMICS 

vested  in  live  stock.  In  the  dairy  districts,  espe- 
cially, it  is  common,  therefore,  for  the  landlord 
to  furnish  a  part  of  the  live  stock.  In  some  in- 
stances the  landlord  furnishes  a  given  number  of 
cows,  and  other  kinds  of  live  stock,  while  the 
tenant  furnishes  the  horses  (the  number  to  be 
kept  being  limited  by  the  contract),  the  tools,  ma- 
chinery, etc.,  necessary  to  operate  the  farm.1  In 
other  instances  the  "stock  and  land"  lease  is  so 
arranged  that  the  landlord  and  the  tenant  each 
owns  a  half  interest  in  all  of  the  live  stock,  tools, 
machinery,  etc.,  necessary  to  operate  the  farm. 
The  tools  and  machinery  are  sometimes  furnished 
by  the  tenant,  and  in  other  cases  each  party  owns 
a  half  interest  in  them,  in  fact  there  exists  the 
greatest  variety  of  arrangements  between  land- 
lords and  tenants.2  The  management  of  the 
farming  operations  is  usually  under  the  close 
supervision  of  the  landlord.  The  product  is  usu- 
ally shared  equally  by  landlord  and  tenant.  This 
form  of  tenancy  is  essentially  a  partnership  in 
which  the  labor  is  balanced  against  the  land. 

The  landlords  are  usually  unwilling  to  enter 
into  an  agreement  to  let  land  on  this  plan  for  more 
than  one  year,  unless  they  know  the  tenant.  On 
the  other  hand,  it  is  well  understood  by  both 
parties  that  it  would  be  unprofitable  to  enter  into  a 
partnership  of  this  kind  for  but  one  year.  It  is 

1  See  Appendix  B  at  the  end  of  this  chapter. 

2  See  Appendix  C  at  the  end  of  this  chapter. 

266 


TENANCY  AND  L AN D O WN ERSHI  P 

common,  therefore,  where  the  landlord  and  the 
tenant  are  acquainted  with  each  other,  for  ten- 
ancies of  this  kind  to  be  entered  upon  for  three,  or 
five  year  periods,  with  the  understanding  that  the 
tenant  is  to  remain  for  a  much  longer  period  if 
satisfactory  to  both  parties. 

Where  land  is  let  for  a  share  of  the  crop  there 
are  so  many  details  which  must  be  agreed  upon  by 
both  parties,  that  troublesome  differences  of  opin- 
ion are  likely  to  arise.  It  is  quite  generally 
agreed  among  those  concerned,  however,  that 
where  difficulties  arise  between  landlords  and  ten- 
ants, it  is  usually  due  to  the  fact  that  one  or  both 
of  the  parties  is  too  grasping.  A  grasping  land- 
lord drives  the  tenant  to  use  dishonest  means  in 
order  to  make  both  ends  meet.  The  landlord 
who  is  willing  to  give  his  tenants  a  fair  chance, 
and  then  insists  on  good  farming  and  honest  busi- 
ness, and  discharges  every  tenant  at  once  who  is 
very  inefficient  and  not  strictly  honest,  will  have 
little  trouble  with  his  tenants. 

Time  and  again,  landlords  have  said  to  the 
writer  that  if  both  parties  would  observe  the 
golden  rule  there  would  be  no  occasion  for  trouble 
between  landlords  and  tenants.  There  is  occa- 
sion, very  often,  for  the  use  of  the  golden  rule  in 
the  relations  between  the  share  tenant  and  his 
landlord.  This  is  true  because  of  the  close  rela- 
tions into  which  they  are  thrown  in  the  manage- 
ment of  the  farm.  The  landlord  may  think  that  a 
267 


AGRICULTURAL    ECONOMICS 

certain  field  of  Indian  corn  should  be  cultivated 
one  time  more  than  the  tenant  cares  to  cultivate 
it.  The  tenant  may  figure  that  his  share  of  the 
additions  to  the  crop  due  to  the  extra  cultivation, 
will  not  remunerate  him  for  the  extra  effort.  In 
a  case  of  this  kind,  however,  the  fair  minded 
tenant  should  be  willing  to  give  as  many  cultiva- 
tions to  the  crop  as  he  would  if  he  owned  the  land, 
and  this  is  all  a  fair  minded  landlord  should  ask. 
Cash  tenancy.1 — Cash  tenancy  is  usually  con- 
sidered by  economists  as  a  step  in  advance  of  share 
tenancy.  "This  method  of  putting  out  lands  to 
farm,"  says  Turgot,2  a  French  writer,  whose 
work  was  published  in  1770,  "is  the  most  advan- 
tageous of  all,  both  to  the  proprietors  and  to  the 
cultivators;  it  establishes  itself  everywhere  where 
there  are  rich  cultivators  in  a  position  to  make  the 
advances  of  the  cultivation;  and  as  rich  cultiva- 
tors can  provide  the  land  with  much  more  labor 
and  manure  there  results  from  it  a  prodigious  in- 
crease in  the  produce  and  revenue  of  estates.  In 
Picardy,  Normandy,  the  neighborhood  of  Paris, 
and  in  most  of  the  provinces  of  the  North  of 
France,  the  lands  are  cultivated  by  cash  tenants. 
In  the  provinces  of  the  South  they  are  cultivated 
by  share  tenants;  the  provinces  of  the  North  of 

1  See  Appendix  D  at  the  end  of  this  chapter  for  copy  of  a 
Wisconsin  cash  lease. 

a  Reflections  on  the  Formation  and  the  Distribution  of 
Riches  (Economic  Classics,  edited  by  W.  J.  Ashley),  p.  24. 

2,68 


TENANCY   AND   L AN D O WN ER SH  I  P 

France  are  likewise  incomparably  richer  and  bet- 
ter cultivated  than  those  of  the  South." 

While  only  a  little  more  than  a  third  of  the 
tenant  farmers  of  the  United  States  pay  a  cash 
rent,  this  form  of  tenancy  has  been  increasing 
more  rapidly  in  recent  years  than  has  share  ten- 
ancy. In  1880,  31.1  per  cent,  of  farms  operated 
by  tenants  were  operated  by  cash  tenants ;  in  1890, 
35.1  per  cent. ;  and  in  1900,  37.2  of  all  such  farms 
were  let  for  a  cash  rent. 

Landlords  who  live  too  far  from  their  land,  or 
are  too  busy,  to  give  it  the  needed  supervision  for 
making  share  tenancy  a  success,  usually  prefer 
to  let  their  farms  for  a  cash  rent.  It  is  claimed  by 
many  landlords  that  the  tenants  devote  much 
greater  care  to  their  farming  under  the  cash  sys- 
tem of  letting  land.  The  feeling  that  every  extra 
bushel  of  grain  and  every  extra  fork  of  hay  is  all 
his  own  will  naturally  make  the  tenant  more 
painstaking  than  he  would  be  if  only  a  part  of 
these  products  were  to  be  added  to  his  own 
profits. 

This  desire  to  obtain  as  large  a  return  as  pos- 
sible is,  at  the  same  time,  the  greatest  source  of 
trouble  in  adjusting  the  relations  between  land- 
lords and  tenants.  The  tenant  who  has  a  con- 
tract for  but  one  year  is  inclined  to  look  too 
strictly  to  securing  as  large  a  profit  as  possible 
for  that  one  year  without  any  regard  to  the  future. 
As  a  result  of  this  short-sighted  economy,  too 
269 


AGRICULTURAL    ECONOMICS 

large  a  proportion  of  the  land  is  often  devoted  to 
exhausting  crops  and  the  larger  profit  of  the  one 
year  is  obtained  at  the  expense  of  the  profits  of 
future  years.  The  cash  tenant  sacrifices  the  long- 
time-average returns  in  order  that  his  net  profit 
for  the  one  year  may  be  increased. 

By  proper  regulations  with  respect  to  the  pro- 
portion of  the  land  which  shall  be  devoted  to  cer- 
tain crops,  this  difficulty  can  be  more  or  less  suc- 
cessfully overcome,  but  such  regulations  are  al- 
ways annoying  to  the  tenants.  The  granting  of 
a  lease  for  several  years  is  thought  by  many  to  be 
all  that  is  necessary  to  meet  the  difficulties  arising 
from  the  short-sightedness  of  the  tenants,  but 
many  landlords  object  to  making  a  contract  for  a 
period  of  any  great  length.  With  all  the  diffi- 
culties which  may  beset  this  system,  cash  tenancy 
is  preferable  to  share  tenancy  wherever  the  man- 
agement of  the  farm  is  to  be  left  almost  entirely 
to  the  tenant,  and  where  agriculture  is  extensive 
and  where  the  use  of  commercial  fertilizers  is  un- 
known the  letting  of  land  for  cash  is  a  fairly  suc- 
cessful method. 

Where  intensive  culture  and  the  use  of  com- 
mercial fertilizers  have  become  necessary  the  ten- 
ant problem  takes  on  a  more  acute  form.  If  we 
would  study  to  advantage  the  problems  which 
arise  under  these  conditions,  we  must  turn  our 
attention  to  an  older  country  than  our  own,  where 
the  tenant  problem  has  been  a  more  serious  one, 
270 


TENANCY   AND   L AN D O W N ERS H  I  P 

and  whence  we  may  learn  from  the  experience  of 
others  the  remedies  which  are  fast  becoming 
necessary  to  good  relations  between  landlords  and 
tenants  in  this  country.  The  further  discussion 
of  the  tenant  problem  will  be  deferred,  therefore, 
until  the  next  chapter  in  which  the  experience  of 
the  English  in  adjusting  the  relations  between 
landlords  and  tenants  will  be  taken  up. 

APPENDIXES  TO  CHAPTER  XII 
APPENDIX  A 

LEASE  USED  IN  LETTING  THE  FARMS  OF  THE  ESTATE  OF 

HIRAM  SIBLEY,  F.  A.  WARNER,,  MANAGER. 
There  are  more  than  one  hundred  leased  farms  belonging 

to  the  Estate  of  Hiram  Sibley,  Sibley,  Illinois.     Mr.  F.  A. 

Warner  has  the  reputation  of  being  an  unusually  successful 

manager  of  landed  estates,  and  we  are  very  glad,  for  this 

reason,  to  be  able,  through  his  courtesy,  to  include  a  copy 

of  the  lease  which  he  uses. 

Farm  No 

THIS  INDENTURE,  Made  and  entered  into  this  first  day 
of  March,  A.  D.,  190. .,  between  the  ex- 
ecutors of  the  Estate  of  Hiram  Sibley, 

parties  of  the  first  part,  and 

party  of  the 

second  part :  Witnesseth,  That  the  par- 
ties of  the  first  part  have  this  day  de- 
mised, leased  and  to  farm  let,  and  by 
these  presents  do  demise,  lease  and  to 
farm  let  to  the  party  of  the  second  part 
the  following  described  land,  situated  in 
the  County  of  Ford,  and  State  of  Illinois : 

'I.  Description         The  quarter  of  section in 

of  land.  Town North  Range cast 

of  the  Third  Principal  Meridian. 
271 


AGRICULTURAL    ECONOMICS 

2.  Period  of  To  Have  and  to  Hold  the  same  to  said 
lease.                    party  of  the  second  part  for  one  year, 

commencing  on  the  first  day  of  March, 
190. .,  for  and  during  and  until  the  first 
day  of  March,  190. ., 

3.  Rent  share         And  the  party  of  the  second  part  cove- 
of  crops.  nants  with  the  parties  of  the  first  part  to 

pay  as  rent  for  said  premises  two-fifths 
(2-5)  part  of  the  corn,  two-fifths  (2-5) 
part  of  the  oats  and  other  small  grain  and 
one-half  (%)  part  of  all  kinds  of  straw 
raised  or  grown  upon  said  premises. 

4.  Labor,  etc.,  The   said   party    of   the    second   part 
by  tenant.           agrees   to   furnish   all   necessary  teams, 

implements,  seed  and  labor  to  properly 
prepare  and  cultivate  said  land,  and  all 
crops  thereon,  in  extra  good  and  farmer- 
like  manner;  to  put  in  said  crops  in 
good  order  as  early  as  the  season  will 
admit,  to  harvest  said  crops  as  soon  as 
they  are  sufficiently  matured,  and  to 
promptly  deliver  the  rent  share  thereof 
to  said  party  of  the  first  part  in  such  man- 
ner and  at  such  times  as  hereinafter  spec- 
ified. 

5.  Acreage  and          The  party  of  the  second  part  hereby 

kind  of  covenants    to   farm acres    in   corn, 

crops.  acres   in   oats, acres   in   pas- 

ture and  lots,  and  further  agrees  to  sow 

acres  of  the  oats  land  in  red  clover, 

each  party  to  furnish  one-half  (%)  the 
clover  seed. 

6.  Planting  and          Corn  to  be  planted  in  check  rows  on 
cultivation  land  to  be  prepared  as  party  of  the  first 
of  corn.               part  may  direct,  and  to  be  cultivated  at 

least  three  times,  twice  the  way  the  corn 
was  planted  and  once  crosswise,  during 
proper  season. 
272 


TENANCY  AND  LAND OWN ER SHI  P 

Manner  and  The  said  party  of  the  second  part  here- 
time  of  deliv-  by  covenants  and  agrees  that  he  will 
ery  of  rent  deliver  the  rent  share  of  the  corn,  as 
corn.  stated  above,  to  said  party  of  the  first 

part,  in  crib  at  Sibley  Station,  Ford 
County,  Illinois,  clean  husked  and  in 
good  condition,  and  before  any  other 
share,  part  or  portion  of  said  crop  shall 
have  been  gathered,  and  to  complete  de- 
livery of  said  rent  portion  before  the  first 
day  of  January,  190..,  and  to  remove 
from  the  fields  the  remainder  of  said  corn 
crop  before  the  first  day  of  February, 
190. .,  and  that  he,  the  said  party  of  the 
second  part,  shall  divide  said  crop  of 
corn  by  the  rows  as  standing  in  the  field 
in  a  just,  fair  and  equitable  manner. 
Sixteen  (16)  rows  for  rent  share  and 
twenty-four  (24)  rows  for  tenant's  share. 
The  counting  and  laying  out  of  the  rent 
rows  and  the  tenant's  rows  shall  be  done 
before  the  fifteenth  day  of  October,  190. ., 
and  the  tenant's  rows  shall  be  marked  by 
cutting  out  four  (4)  or  more  hills  of 
each  row  on  one  end  of  the  tenant's 
share. 

Harvesting  The    said    party    of   the    second   part 

and  delivery       agrees  to  properly  stack  on  said  premises 

of  seed  small      all  small  grain  as  soon  as  sufficiently  dry 

grain,  straw.       after  being  cut,  and  at  his  own  expense 

to  thresh  the  same  before  the  first  day  of 

October,  190. .,  and  to  divide  said  oats 

at  the  threshing  machine,   using  tallies 

furnished  by  party  of  the  first  part,  and 

to  deliver  the  rent  portion  to  said  party 

of  the  first  part,  at  Sibley,  Illinois,  and  to 

properly  stack  the  rent  share  of  the  straw 

as  it  comes  from  the  threshing  machine. 

Also  to  stack  in  good  manner  on  said 

18  273 


AGRICULTURAL    ECONOMICS 

premises,  as  directed,  the  rent  portion  of 
hay  grown  thereon. 

p.  Ditches  to  be  All  open  ditches  to  be  cleaned  out  by 
cleaned.  the  party  of  the  second  part,  with  team 

and  scraper,  when  directed  by  said  first 
party.  All  willows  or  other  trees  or 
shrubs  growing  in  open  ditches  to  be  dug 
out  by  the  party  of  the  second  part.  All 
tile  outlets  to  be  kept  open  and  in  repair 
by  said  second  party. 

JO.  Weeds  in  The  said  party  of  the  second  part  to 

highways  to  mow  all  weeds  on  highways  adjoining 
be  mowed.  said  premises,  to  the  center  of  the  trav- 
eled road,  during  the  first  ten  days  of  the 
month  of  September,  190. .,  such  mowing 
to  be  done  upon  that  side  of  said  high- 
ways as  adjoins  said  land. 

11.  First  party  Said  party  of  the  first  part  also  reserves 
may  plow          the  privilege  of  plowing  the  stubble  or 
stubble                stalk  ground  on  said  premises  when  said 
ground.              party  of  the  second  part  may  have  secured 

the  crops  or  grain  grown  thereon,  and 
may  enter  on  said  premises  at  any  time 
for  purposes  of  improvement,  or  for  any 

12.  Right  of  reasonable  purpose  which  said  party  of 
entry  re-           the  first  part  may  deem  proper ;  and  un- 
served.  less  otherwise  agreed  in  a  written  con- 
tract, the  use  of  the  stalk  and  stubble 
ground  shall  belong  to  and  be  vested  in 
the  said  first  parties,  or  be  at  their  dis- 
posal   as   they   may    deem   most   advan- 
tageous to  their  interests. 

13.  Meadows  And  further  it  is  agreed,  that  no  mead- 
and  pas-             ows    or    pastures    shall    be    plowed    or 
tures  not  to      broken  up  during  the  term  of  this  lease 
be  plowed.        without  the  written  consent  of  said  first 

parties. 

The    said   party    of   the   second   part 
agrees  to  keep  said  premises  free  from 

274 


TENANCY  AND  L ANDO W N ERSHI  P 

14.  Burrs  and  burrs,  Canada  thistles,  bull  nettles,  bur- 
weeds  to  be  dock  and  other  noxious  weeds  by  pulling 
destroyed,  out  and  destroying  all  such  weeds  before 
hedges,  etc.,  the  20th  day  of  August,  190. .,  to  prop- 
kept  clear,  erly  cut  or  trim  during  August  and  Sep- 
manure  to  tember  the  hedges  belonging  to  said  land, 
be  spread,  and  pile  and  burn1  all  brush  resulting 
etc.,  deliv-  therefrom,  to  keep  clear  of  weeds  and 
ery  of  pos-  trash  all  hedges,  turn  rows  and  ditches 
session  on  the  said  land;  to  spread  when  and 

without  where    directed    all    manure    that    may 

notice.  accumulate  on  said  premises ;  to  keep  in 

good  repair  all  fences  and  outbuildings 
on  said  premises ;  to  properly  care  for  all 
hedges,  trees  and  shrubbery  of  all  kinds ; 
and  to  deliver  the  free  and  full  posses- 
sion of  said  premises  (with  fences, 
buildings  and  other  appurtenances  there- 
with belonging,  in  as  good  condition  as 
when  received,  except  the  natural  wear 
from  careful  usage  and  the  elements)  to 
said  parties  of  the  first  part,  their  succes- 
sors or  assigns,  on  the  first  day  of  March, 
A.  D.,  190. .,  without  any  further  demand 
or  notice. 

75.  Not  to  sub-  It  is  especially  covenanted  and  agreed 
let.  that  the  said  party  of  the  second  part 

shall  not   sub-let   said  premises  or  any 
part  thereof,  without  the  written  consent 
of   the    parties    of   the   first  part.    The 
16.  Stock  con-        party  of  the  second  part  also  covenants 
fined.  that  no  live  stock  of  any  character  shall 

be  permitted  to  run  at  large  on  said 
premises,  nor  to  be  turned  into  said 
premises,  except  within  a  properly  en- 
closed pasture,  and  said  party  of  the  sec- 
ond part  further  agrees  to  pay  in  cash, 
on  or  before  September  1st,  190. .,  to 
said  parties  of  the  first  part  the  sum  of 

275 


AGRICULTURAL    ECONOMICS 

17.  Pasture  four    dollars    ($4.00)    per    acre    for    in- 
rent.                   closed  pasture  and  for  all  parts  of  said 

premises  from  which  the  stipulated  share 
rent  is  not  received,  and  land  sown  to 
clover  and  remaining  in  clover  second 
year  the  sum  of  two  and  fifty  one-hun- 
dredths  dollars  ($2.50)  per  acre  for  first 
year,  and  said  land  to  be  used  for  hay 
and  seed  only.  Each  succeeding  year  the 
rent  to  be  same  as  pasture  land. 

All  cash  payments  of  rent  to  draw 
interest  at  the  rate  of  seven  per  cent,  per 
annum  after  the  date  when  due  until 
paid. 

18.  Material  to  All  materials  for  improvements  of  any 
be  hauled.          kind  to  be  hauled  at  the  expense  of  sec- 
ond party,  and  no  claim  for  labor  or  for 
materials    will    be    recognized    by    first 
parties,  excepting  as  agreed  in  writing  to 
be  endorsed  on  this  lease. 

It  is  understood  and  agreed  that  no 
buildings  or  sheds  of  any  kind  shall  be 
attached  to  buildings  belonging  to  parties 
of  the  first  part  without  the  consent  of 
said  first  parties. 

19.  Lien  for  The  party  of  the  second  part  covenants 
rent.                   and  agrees  that  the  parties  of  the  first 

part  shall  have  a  first  lien  and  claim  on 
all  the  products  of  said  land,  during  said 
term,  to  secure  the  payment  of  said  rent, 
and  the  taking  or  giving  of  any  "notes  or 
other  security  for  said  rent  shall  in  no 
wise  affect  said  lien,  but  shall  be  taken 
and  considered  as  additional  security  to 
said  landlord's  lien. 

And  it  is  further  understood  and  agreed 

that  if   party  of  the   second  part  shall 

abandon  said  premises,  or  shall  fail  from 

any  cause  to  comply  with  all  his  agree- 

276 


TENANCY   AND   L AN D O W N ER SH  I  P 

20.  Premises  to  ments  herein,  the  said  parties  of  the  first 
revert  to  part  may  at  any  time,  when  such  aban- 
first  party  donment  or  failure   occurs,  take  actual 
in  case  of  possession  of  said  premises  and  buildings 
abandon-  thereon,  which  said  party  of  the  second 
went.  part  agrees  to  surrender,  and  said  first 

parties- may  employ  other  persons  to  tend 
said  crop  and  harvest  or  gather  the  same, 
and  may  remove  and  sell  the  same  at  pub- 
lic or  private  sale  and  apply  the  proceeds 
thereof  to  the  expense  and  cost  of  carry- 
ing out  the  provisions  of  this  lease  and 
the  payment  of  said  rent  hereby  reserved, 
and  all  advances,  and  if  the  proceeds  of 
the  crops  as  aforesaid  shall  not  be  suffi- 
cient to  repay  said  first  parties  all  the 
money  so  expended,  the  said  party  of  the 
second  part  agrees  to  refund  to  said 
parties  of  the  first  part  such  deficiency  on 
demand  out  of  any  other  property  be- 
longing to  the  said  second  party. 

21.  First   party  And  it  is  further  expressly  agreed  be- 
way   termi-       tween  the  parties  hereto,  that  if  any  de- 
note lease          fault  shall  be  made  of  any  of  the  coven- 
fey  default.         ants  and  agreements  herein  contained  to 

be  kept  by  party  of  the  second  part,  this 
lease  shall  at  the  election  of  the  parties  of 
the  first  part  be  null  and  void. 

22.  Superin-  And  it  is  further  understood  and  agreed 
tendence  of       that  all  the  farm  work  on  said  premises 
farm  work.       during  said  term  shall  be  under  the  direc- 
tion and  supervision  of  the  parties  of  the 
first  part,  their  agent  or  superintendent. 

The  cost  of  all  seed  or  grain  for  feed 
furnished  by  first  parties  is  to  be  consid- 
ered as  advances,  and  added  to  the  rent 
herein  reserved. 

All  the  foregoing  covenants  and  agree- 
277 


AGRICULTURAL    ECONOMICS 

23.  Considers-        ments  on  the  part  of  said  party  of  the 
tion.  second  part,   form   the  consideration  of 

this  lease,  and  together  constitute  the  rent 
herein  reserved. 

Witness  the  hands  and  seals  of  the 
parties  aforesaid  the  day  and  year  first 
above  written. 

APPENDIX  B. 

COVENANTS   FOUND  IN   WISCONSIN   LEASES   WHERE   LIVE 
STOCK  is  LET  WITH  THE  LAND. 

After  describing  the  land,  giving  the  time  of  entry  which 
is  sometimes  October  i,  sometimes  i/iarch  i,  and  sometimes 
April  i,  and  the  term  for  which  the  lease  is  drawn,  which 
varies  from  one  to  five  years,  the  following  covenants  are 
inserted : 

The  landlord  agrees  to  furnish  for  the  use  of  said  farm 
during  said  lease,  from  twenty-five  to  thirty  cows,  one  bu>l, 
eight  head  of  brood  sows,  one  boar,  all  grass  seed  that  is 
required  and  one-half  of  all  feed  for  said  stock. 

The  tenant  agrees  to  do  all  the  work  required  to  operate 
said  farm  in  a  workmanlike  manner. 

Also  to  put  in  such  crops  as  shall  be  mutually  agreed 
upon. 

Also  to  haul  out  and  distribute  upon  said  farm,  at  places 
most  needed,  all  manure  made  thereon,  and  at  such  times 
and  at  such  places  as  shall  be  designated  by  the  landlord. 

The  tenant  agrees  also,  to  work  the  highway  taxes  as- 
sessed on  said  farm  and  property  for  the  year  190. . 

The  tenant  further  agrees  to  furnish  the  teams  and  all 
farming  utensils  necessary  to  work  said  farm  in  the  best 
possible  manner.  (It  is  common  where  the  horses  thus  fur- 
nished by  the  tenant,  are  fed  out  of  the  common  stores  of 
feed,  to  limit  the  number  of  horses  that  can  be  kept,  and  if 
the  number  be  increased  beyond  this  limit  to  charge  the 
tenant  for  the  feed  thus  used.) 

Also  one-half  of  all  tke  feed  necessary  to  feed  the  stock 
heretofore  described. 

278 


TENANCY   AND   LANDOWNERSHIP 

Also  to  milk  said  cows  and  to  take  proper  care  of  all  of 
said  stock. 

The  milk  from  said  cows  is  to  be  delivered  free  of 
charge  by  said  tenant  to  such  creamery  or  cheese  factory  as 
shall  be  for  the  best  interest  of  both  parties,  and  the  money 
derived  therefrom  is  to  be  equally  divided  between  the  land- 
lord and  the  tenant. 

All  feed  of  every  description  raised  on  said  farm  during 
the  term  of  this  lease  is  to  be  fed  out  upon  said  farm  if  it 
can  be  fed  profitably,  except  in  case  any  wheat  is  raised 
thereon,  the  same  to  be  equally  divided  after  threshing,  each 
party  to  have  one-half,  and  the  half  belonging  to  the  land- 
lord is  to  be  stored  by  the  tenant  in  the  granary  situated  on 
said  farm. 

It  is  agreed  that  all  grain,  feed  and  repairs  necessary 
for  the  use  of  said  farm  and  stock  is  to  be  hauled  by  the 
tenant  free  of  charge. 

It  is  mutually  agreed  that  one-half  of  the  bills  for  bind- 
ing twine  and  for  threshing  shall  be  paid  by  each  party  to 
this  contract. 

The  tenant  is  to  do  all  the  work  in  putting  up  necessary 
fences  on  said  farm,  the  landlord  to  furnish  the  materials. 

The  tenant  further  agrees  to  take  all  necessary  steps  to 
prevent  any  washouts  on  said  farm,  by  using  proper  care  in 
plowing  and  to  seed  such  places  as  are  likely  to  be  washed 
out. 

It  is  further  agreed  by  and  between  said  parties  that  all 
the  hay,  corn  fodder,  straw,  and  other  rough  feed  raised 
upon  said  farm  and  not  fed  out  at  the  expiration  of  this 
compact  is  to  be  the  property  of  the  landlord. 

Also  that  all  grain  raised  upon  said  farm  that  can  be 
profitably  fed  to  the  stock  shall  be  so  fed  and  the  surplus, 
if  any  remain  at  the  expiration  of  this  contract,  is  to  be 
equally  divided  between  said  parties. 

Also  that  the  increase  from  said  stock  shall  be  sold  at 
such  time  or  times  as  shall  be  deemed  to  the  best  interests  of 
both  parties  and  the  proceeds  equally  divided. 

Also  that  when  stock  or  grain  is  sold  it  is  to  be  deliv- 
ered on  the  market  by  the  tenant. 
279 


AGRICULTURAL    ECONOMICS 

It  is  agreed  that  the  tenant  is  to  have  the  exclusive  use 
of  one  cow.  Also  one  acre  of  ground  for  garden  purposes. 

At  the  expiration  of  this  contract  said  tenant  agrees  to 
deliver  peaceable  possession  of  said  farm  together  with  the 
stock  described  herein  to  said  party  of  the  first  part. 

In  witness  whereof,  etc. 

APPENDIX  C 

COVENANTS  FOUND  IN  A  COMBINED  LEASE  AND  PARTNER- 
SHIP USED  IN  WISCONSIN 

This  indenture  made  this  day  of  March, 

190. .,  between of  the  city  of , 

county  of ,  state  of ,  party  of  the 

first  part  and of  said  city,  county,  and  state 

party  of  the  second  part. 

WITNESSETH  that  ,  party  of  the  first 

part,  agrees  to  rent  his  farm,  etc.  [Here  follows  the  de- 
scription of  the  farm  which  consists  of  acres  of 

arable  land  and acres  of  pasture  land],  to 

party  of  the  second  part. 

It  is  agreed  between  these  contracting  parties,  that  they 
are  to  buy  and  own  all  personal  property  that  is  needed  and 
used  in  conducting  operations  on  this  farm  and  share  alike 
equally  all  profits  and  losses  resulting  from  same. 

It  is  agreed  that  the  said  party  of  the  second  part  is  to 
perform  or  pay  for  the  performance  of  all  labor  used  in 
conducting  operations  on  said  farm  except  it  be  for  the  re- 
pairing or  painting  of  buildings  which  the  party  of  the  first 
part  must  be  holden  for  unless  they  be  minor  repairs. 

Also  that  said  party  of  the  second  part  is  to  build  and 
keep  in  good  repair  all  fences  on  said  farm  and  all  material 
used  for  same  to  be  furnished  by  party  of  first  part  at  his 
own  expense. 

Also  all  grass  seeds  are  to  be  furnished  by  party  of  the 
first  part. 

Also  that  said  party  of  the  second  part  is  to  work  or  pay 
the  road  tax,  party  of  the  first  part  is  to  pay  all  taxes  on 
realty,  and  the  taxes  on  personal  property  to  be  paid  jointly. 


TENANCY   AND   LANDOWNERSHIP 

Also  the  bill  for  threshing  grain  or  seeds,  for  binder 
twine,  harness  repairs,  blacksmith  work  and  veterinary  hire 
to  oe  paid  jointly. 

It  is  agreed  also  that  all  ditches  forming  on  the  land  are 
to  be  properly  filled  at  the  proper  time  by  the  party  of  the 
second  part. 

Also  that  all  noxious  weeds,  including  bull  thistles  to  be 
cut  at  the  proper  time  and  the  weeds  of  any  description  on 
the  highways  adjoining  the  above  described  land  to  be  cut 
to  the  middle  of  the  road  by  party  of  the  second  part. 

Also  all  flood  wood  and  debris  lodging  along  the  banks 
of  the  creek  from  freshets  to  be  removed  by  party  of  the 
second  part.  All  brush  and  debris  in  the  grove  on  said 
farm  to  be  kept  gathered  up  and  burned  by  party  of  the 
second  part.  All  dead  trees  in  said  grove  to  be  used  by 
party  of  the  second  part  for  fire  wood,  if  he  wants  the 
same,  also  all  refuse  from  buildings  and  fences  not  fit  for 
use  again. 

Also  all  brush  and  weeds  of  any  description,  growing  in 
fence  corners  on  said  farm  to  be  kept  cut  by  party  of  the 
second  part. 

It  is  further  agreed  that  no  stock  shall  be  allowed  in  the 
pastures  or  meadows  while  the  frost  is  leaving  the  ground 
or  until  the  ground  is  fairly  settled. 

It  is  also  agreed  that  the  party  of  the  first  part  is  to  have 
the  use  of  teams  for  his  private  use  at  any  time  he  wishes 
when  they  are  not  in  use  on  the  farm,  party  of  the  second 
part  to  have  the  same  privilege. 

Also  that  no  grain  or  feed  is  to  be  sold  off  the  above 
farm  without  the  consent  of  both  parties  to  this  contract. 

Also  that  the  said  lease  of  the  above  described  land  is  to 

run  from  March  . ..  190. .,  for  the  term  of years, 

and  at  the  termination  of  said  lease,  should  a  dissolution 
be  agreed  upon,  all  personal  property  to  be  equally  divided 
between  said  parties.  [There  are  various  methods  used  in 
dividing  the  property  at  the  termination  of  a  partnership  of 
this  kind.  One  method  is  to  have  the  property  appraised 
by  disinterested  parties  and  then  retained  by  the  one  or  the 
other  party  as  the  case  may  be,  who  pays  to  the  other  party 
281 


AGRICULTURAL    ECONOMICS 

one-half  the  appraised  value  of  all  such  property.  Another 
method  is  to  put  the  property  up  at  public  sale  and  divide 
the  proceeds  equally  between  the  contracting  parties.  Still 
another  method  is  to  have  the  tenant  divide  all  of  the  live 
stock  of  each  kind  and  all  of  the  other  personal  property 
which  is  held  in  common,  into  two  lots  and  then  the  land- 
lord takes  his  choice  of  the  lots.] 

APPENDIX  D 
A  WISCONSIN  CASH  LEASE 

This  Indenture,  made  and  entered  into  this day 

of  March,  190. .,  by  and  between ,  of  the  city 

of ,  county  of and  state  of  Wis- 
consin, party  of  the  first  part  and  ,  of  the 

county  and  state  aforesaid,  party  of  the  second  part, 

Witnesseth :  that  the  said  party  of  the  first  part,  for  and 
in  consideration  of  the  rents,  covenants  and  agreements 
hereinafter  mentioned,  reserved  and  contained,  on  the  part 
and  behalf  of  the  party  of  the  second  part,  their  heirs, 
executors,  administrators  and  assigns,  to  be  paid,  kept  and 
performed,  hath  demised  and  to  farm  let,  and  by  these 
presents  doth  grant,  demise  and  to  farm  let,  unto  the  said 
party  of  the  second  part  that  certain  farm.  [Here  follows 
description  of  the  farm  to  be  let.] 

To  have  and  to  hold  the  said  demised  premises  for  the 
term  of  three  years,  said  term  beginning  March  I,  190. ., 
and  ending  with  the  last  day  of  February,  190. .  ;  then  to  be 
fully  completed  and  ended  unless  previously  terminated  ac- 
cording to  conditions  hereinafter  mentioned. 

Yielding  and  paying  as  rent  therefor  to  the  said  first 
party,  his  heirs,  .executors,  administrators  or  assigns,  the 
sum  of  Sixteen  Hundred  Eighty  Dollars  ($1680.00),  accord- 
ing to  the  tenor  and  effect  of  six  certain  promissory  notes, 
of  even  date  herewith,  due  and  payable  as  follows : 

Number  one,  for  $280.00  due  Nov.  I5th,  1903 
Number  two,  for  $280.00  due  Feb.  I5th,  1004 
Number  three,  for  $280.00  due  Nov.  I5th,  1004 
Number  four,  for  $280.00  due  Feb.  i5th,  1905 
282 


TENANCY   AND   LAND OWN ERSHI  P 

Number  five,     for  $280.00  due  Nov.  I5th,  1905 
Number  six,      for  $280.00  due  Feb.    I5th,  1906 

It  is  expressly  stipulated  and  agreed,  by  and  between  the 
parties  hereto,  that  on  or  before  November  I5th,  of  each 
year,  during  the  continuance  of  this  lease,  the  said  second 
party,  their  heirs  or  assigns,  will  secure  to  the  said  party 
of  the  first  part,  his  heirs  or  assigns,  to  the  entire  satisfac- 
tion of  the  latter,  the  payment  of  the  above  mentioned  notes 
for  the  year's  rent  next  succeeding  the  year  in  which  said 
security  is  given. 

The  said  second  party  covenants  and  agrees  to  cultivate 
the  plow-land  on  said  farm  in  a  good  farmer-like  manner; 
not  to  grow  any  one  kind  of  grain  more  than  two  successive 
seasons  on  the  same  piece  of  the  plow-land  without  special 
permission  of  the  first  party;  to  keep  at  least  80  acres  of 
the  said  demised  premises,  not  including  "orchard  lot," 
house  and  barn  yard,  seeded  down  to  grass  for  meadow  and 
pasture;  to  "fall-plow"  all  the  "stubble  land"  immediately 
after  the  grain  is  cut  and  before  the  weeds  become  grown 
rank  on  the  same,  except  in  the  fall  of  the  year  1904;  to 
keep  all  hollows  and  ravines,  on  said  farm,  seeded  down  to 
grass  to  prevent  washing  thereof,  and  in  case  it  should  be 
discovered  that  a  "wash"  has  commenced  in  any  of  said 
hollows  or  ravines  said  second  party  agrees  to  haul  and 
place  in  such  "wash"  straw,  manure,  brush  or  whatever  may 
be  necessary  to  prevent  further  washing,  and,  after  plowing 
or  otherwise  covering  same  with  soil,  to  sow  grass  seed  on 
the  same,  said  seed  to  be  furnished  by  the  first  party;  to 
protect,  trim  and  prune  orchard  and  shade  trees  in  a  proper 
manner  and  as  directed  by  the  first  party;  to  keep  fences, 
buildings,  wells,  cisterns,  windmill,  pumps,  tanks,  and  all 
other  improvements  on  said  premises  in  as  good  repair  and 
condition  as  the  same  are  now  in,  or  may  be  put  in,  during 
said  term,  all  free  of  charge  to  lessor  except  that  lessor 
agrees  to  pay  for  new  materials,  should  any  be  necessary; 
that  they  will  not  stable  or  confine  or  permit  any  livestock 
within  any  buildings  on  said  premises  not  built  or  intended 
to  be  used  for  such  purposes. 

Skould  lessor  decide  to  erect  any  buildings  or  fences  of 
283 


AGRICULTURAL    ECONOMICS 

make  any  improvements  on  said  farm  which  will  be  for  the 
use  and  benefit  of  the  lessees,  during  said  term,  the  said 
lessees  hereby  agree  to  haul  all  materials  and  otherwise  as- 
sist to  the  extent  of  their  ability;  and  should  lessor,  at  any 
time,  have  men  employed,  making  improvements  on  said 
premises  who  do  not  live  in  the  immediate  neighborhood,  it 
is  hereby  agreed  and  understood  that  they  shall  be  fur- 
nished, free  of  charge,  with  bed  and  board  by  said  lessees. 

After  threshing  the  grain,  said  lessees  agree  to  stack  the 
straw  in  a  proper  manner  and  to  have  all  straw  and  stalks 
which  are  raised  thereon,  fed  out  and  converted  into  manure 
on  said  demised  premises,  no  straw  or  stalks  to  be  taken  off 
the  farm  without  special  permission  from  the  said  lessor; 
lessees  further  agree  to  haul  out  and  spread  on  said  land, 
where  most  needed,  all  manure  which  is  sufficiently  rotted 
for  fertilizing  purposes. 

Lessees  further  agree  to  take  special  pains  to  keep  the 
buildings  and  yards  clean  and  tidy,  not  allowing  straw, 
manure  or  any  other  litter  to  be  scattered  around,  thus  mak- 
ing the  premises  present  a  better  appearance  and  reducing 
the  liability  of  accident  on  account  of  fire. 
.  If  at  any  time,  the  parties  to  this  lease  decide  to  seed 
down  for  use  as  pasture  or  meadow,  any  part  of  said  prem- 
ises, it  is  understood  and  agreed  that  the  first  party  will 
pay  for  the  grass  seed  decided  necessary  to  do  such  seeding, 
and  that  the  second  party  will,  free  of  charge,  perform  the 
labor  necessary  in  seeding  down  said  land.  In  case  lessees 
desire  to  break  up  any  sod,  either  meadow  or  pasture,  on 
said  farm,  which  would  thereby  reduce  the  number  of  acres 
herein  agreed  to  be  kept  under  sod  by  said  lessees,  they 
hereby  agree  to  seed  down  at  their  own  expense  for  seed 
and  labor,  in  a  good  farmer-like  manner,  as  many  acres  of 
some  other  part  of  the  plow-land  as  they  have  broken  up  of 
sod,  and  in  the  same  year,  all  of  such  breaking  and  seeding 
to  be  done  after  obtaining  permission  of  the  lessor.  The 
said  lessees  further  agree  to  take  extra  pains  to  sow  good 
clean  seed  on  said  farm;  to  keep  the  land  clear  of  all  ob- 
noxious weeds  and  burrs,  pulling  and  digging  the  same  as 
required  by  law.  Also,  to  work  out  or  pay  the  highway  tax 
284 


TENANCY   AND   L AND O WN ER S H  I  P 

on  said  premises,  at  the  proper  time  each  year,  free  of 
charge  to  lessor  and  to  deliver  the  overseer's  receipt  for 
same  to  the  first  party. 

The  second  party  agrees  to  pay  the  rent  promptly  at  the 
time  specified  in  the  above  mentioned  rent  notes ;  to  deliver 
up  possession  of  said  premises  peaceably  and  quietly  and 
in  as  good  repair  and  condition  as  the  same  are  now  in,  or 
may  be  put  in,  reasonable  use  and  ordinary  wear  and  tear 
excepted,  at  the  end  of  said  term. 

The  first  party  expressly  reserves,  for  himself  or  his 
agent,  the  right  to  enter  said  premises  at  any  time,  to  view 
the  same,  to  plant  trees,  erect  buildings  or  fences  or  to 
make  any  improvements  he  may  see  fit,  also  for  the  purpose 
of  plowing  or  hauling  and  spreading  manure  on  any  part 
of  the  premises,  at  any  time  after  the  grain  is  cut  or  the  corn 
picked  in  the  fall  of  the  last  year  that  the  said  second  party, 
their  heirs  or  assigns,  put  in  a  crop  on  said  farm. 

The  first  party  reserves  the  right  to  sell  the  said  demised 
premises,  or  any  part  thereof  at  any  time  in  the  term  of  this 
lease  and  the  said  lease  shall  terminate  and  become  null 
and  void  on  the  first  day  of  March  next  after  such  sale. 
The  first  party  agrees  that,  in  case  of  such  termination  of 
this  lease,  he  will  return  to  the  second  party  all  of  the  above 
mentioned  rent  notes  which  become  due  after  said  first  day 
of  March  last  above  referred  to. 

This  lease  is  understood  and  agreed  to  be  not  assign- 
able by  the  said  lessees. 

In  case  of  failure  to  perform  or  fulfill  any  of  the  cove- 
nants, conditions  or  agreements  of  this  lease,  to  be  done  and 
performed  by  the  said  lessees,  the  said  lessees  will  forfeit 
all  rights  under  this  lease,  and  the  said  lessor,  his  agent  or 
assigns  shall  have  full  authority  to  re-enter  said  premises 
and  oust  said  lessees,  all  notice  under  the  statutes  or  other- 
wise being  expressly  waived;  but  in  case  the  said  lessees 
shall  faithfully  and  punctually  comply  with  all  the  cove- 
nants, conditions  and  agreements  herein  contained,  on  their 
part,  they  are  to  have  peaceable  and  quiet  enjoyment  of  said 
premises  to  the  end  of  said  term.  Witness  our  hands,  etc. 


CHAPTER  XIII 

THE  ADJUSTMENT  OF  THE  RELATIONS  BE- 
TWEEN LANDLORDS  AND  TENANTS 
IN  ENGLAND 

So  long  as  a  country  has  an  abundant  supply  of 
productive  land,  and  its  agriculture  is  character- 
ized by  the  extensive  exploitation  of  the  natural 
fertility  of  the  soil,  the  adjustment  of  the  relations 
between  landlords  and  tenants  is  a  comparatively 
simple  matter.  But  when  some  of  the  elements 
of  this  original  fertility  have  begun  to  show  signs 
of  exhaustion,  or  when  the  increasing  demands  of 
a  growing  population  make  it  necessary  that  each 
acre  of  land  shall  yield  a  larger  product,  so  that 
it  becomes  necessary  to  introduce  a  more  intensive 
system  of  culture,  involving  investments  which 
cannot  be  realized  upon  for  several  years,  then  it 
is  that  the  tenant  problem  becomes  a  serious  one. 

The  same  progress  which  makes  intensive 
farming  necessary,  tends  also  to  augment  the  num- 
bers of  those  who  must  hire  the  land  which  they 
cultivate.  With  the  growth  of  population,  com- 
petition for  the  use  of  land  becomes  more  and 
more  keen  and  drives  the  price  of  land  higher  and 
higher.  This  makes  it  ever  more  and  more  diffi- 


LANDLORDS    AND    TENANTS 

cult  for  the  succeeding  generations  of  farmers  to 
acquire  the  ownership  of  land.  Hence  with  the 
progress  of  society  the  tenant  problem  becomes 
more  general  as  well  as  more  difficult  to  solve. 

England  is  preeminently  the  land  of  tenant 
farmers.  Less  than  fourteen  per  cent,  of  the 
farm  land  of  that  country  is  reported  as  oper- 
ated by  its  owners,  and  in  most  cases  such  land 
is  operated  by  hired  farmers,  or  bailiffs  as  they 
are  called.  About  eighty-six  per  cent,  of  the 
farm  land  of  England  is  operated  by  tenants  who 
pay  a  fixed  rent  for  its  use.  Share  tenancy  is 
not  practised  in  England. 

It  was  more  than  a  century  ago  that  the  prog- 
ress of  English  industrial  society  had  reached  the 
stage  of  development  where  intensive  agriculture 
was  socially  desirable,  and  also  profitable  to  the 
farmers  where  their  relations  to  the  land  were  so 
adjusted  as  to  guarantee  to  them  just  returns 
upon  their  investments.  The  earliest  attempts  at 
improving  the  agriculture  of  the  country  at  once 
brought  forward  the  tenant  problem.  In  1649, 
Walter  Blith  wrote  r1  "If  a  tenant  be  at  ever  so 
great  pains  or  cost  for  improving  of  his  land,  he 
doth  thereby  but  occasion  a  great  rack  upon  him- 
self, or  else  invest  his  landlord  with  his  cost  and 
labor  gratis,  or  at  best  lies  at  his  landlord's  mercy 
for  requital,  which  occasions  a  neglect  of  good 

1Thorold  Rogers,  Work  and  Wages,  pp.  458-459- 
287 


AGRICULTURAL    ECONOMICS 

husbandry  to  his  own,  the  land,  the  landlord,  and 
the  kingdom's  suffering." 

For  more  than  a  century  the  rural  economists 
of  England  have  been  trying  to  solve  this  problem. 
Hence  it  is  in  England  that  the  tenant  problem 
can  best  be  studied  in  the  light  of  history. 

Prior  to  the  introduction  of  the  new  agriculture, 
which  movement  became  important  during  the 
latter  half  of  the  Eighteenth  Century,  the  tenant 
farmers  of  England  usually  held  their  lands  "at 
will,"  without  any  written  agreements.  Under 
this  tenure,  the  common  law  and  the  customs  of 
the  estates  formed  the  only  tie  between  owners 
and  tenants,  and  either  party  could  bring  the 
tenancy  to  a  close,  by  giving  six  months'  notice  to 
the  other.1  Towards  the  close  of  the  Eighteenth 
Century,  it  became  a  common  custom,  where  land 
was  held  from  year  to  year,  to  draw  up  legal 
agreements,  by  which  the  tenants  bound  them- 
selves "to  the  fulfillment  of  certain  clauses  and 
conditions."2  But  the  most  significant  move- 
ment of  this  period  was  that  in  favor  of  leases  for 
a  term  of  years.  The  rural  economists  of  that 
time  were  quite  generally  of  the  opinion  that  long 
leases  were  necessary  wherever  the  farmers  were 
expected  to  make  investments  in  or  upon  the  land, 
such  as  require  several  years  to  yield  their  full 

1  Loudon,  Encyclopedia  of  Agriculture,  p.  764 ;  also,  W. 
Marshall,  Landed  Estates,  1806,  p.  378. 

2H.  E.  Strickland,  Agricultural  Survey  of  the  East  Rid- 
ing of  Yorkshire. 


LANDLORDS    AND    TENANTS 

return.  It  was  stated  in  1799,  that  the  improve- 
ments which  had  taken  place  in  England  prior  to 
that  time  had  been  almost  entirely  due  to  the  cus- 
tom of  granting  twenty-one  year  leases,  and  that 
where  it  was  uncommon  to  grant  leases  for  long 
periods  of  years,  agriculture  remained  in  a  back- 
ward condition.1 

During  the  early  years  of  the  Nineteenth  Cen- 
tury the  English  Board  of  Agriculture  published 
a  series  of  surveys  which  set  forth  the  conditions 
of  agriculture  in  every  county  of  the  kingdom. 
This  material,  supplemented  by  the  other  agricul- 
tural writings  of  the  time,  makes  it  possible  to 
present,  in  considerable  detail,  the  history  of  the 
attempts  to  solve  the  tenant  problem  in  England 
by  the  introduction  of  long  leases. 

From  these  surveys  it  appears  that  the  greater 
part  of  the  tenant  farmers  of  England  one  hun- 
dred years  ago  held  their  farms  "at  will,"  without 
written  agreements,  or  "from  year  to  year"  under 
written  agreements.  In  either  case  they  might  be 
thrown  out  of  the  possession  of  their  farms  on  six 
months'  notice,  at  the  pleasure  of  the  landlord. 
But  while  this  was  the  dominant  form  of  land 
tenure  throughout  the  greater  part  of  England, 
the  use  of  long-term  leases  had  greatly  increased 
during  the  latter  part  of  the  Eighteenth  Century, 
and  leases  varying  in  duration  from  three  to 

1  Brown,    Agricultural    Survey    of    West    Riding    of    York- 
shire,  p.  30 ;  also,  Arthur  Young,  Survey  of  -Norfolk,  p.  47. 

19  289 


AGRICULTURAL    ECONOMICS 

twenty-one  years  were  found  in  every  county. 
Twenty-one-year  leases  were  much  used  in  the 
eastern  counties,  and  leases  running  from  seven  to 
fourteen  years  were  quite  common  in  the  western 
and  southern  counties.  The  county  of  Norfolk, 
the  home  of  the  new  agriculture,  was  preeminently 
the  land  of  long  leases.  Arthur  Young  wrote  of 
this  county :  "The  great  improvements  which 
for  seventy  years  past  have  rendered  Norfolk 
famous  for  its  husbandry,  were  effected  by  means 
of  twenty-one-year  leases,  a  circumstance  which 
very  fortunately  took  place  on  the  first  attempt  to 
break  up  the  heaths  and  warrens  in  the  northwest- 
ern part  of  the  county.  ...  In  general  it  may  be 
held  for  sound  doctrine  in  Norfolk,  that  an  estate 
can  neither  be  improved,  nor  even  held  to  its  for- 
mer state  of  improvement,  without  long  leases."1 
This  view  was  held,  also,  by  that  most  competent 
agricultural  writer  of  the  time,  William  Marshall,2 
who  wrote  as  follows  on  this  same  subject,  in 
1795  :  "Marling  is  the  principal  improvement 
of  a  Norfolk  farm,  but  who  would  marl  on  a 
seven  years'  lease?  Where  much  marling  is  to 
be  done,  fourteen  years  is  too  short  a  term." 

In  some  places,  it  is  true,  the  old  and  simple 
system  of  holding  land  from  year  to  year  was 
thought  to  be  entirely  satisfactory.  It  was  re- 
ported that  great  estates  were  let  in  full  confidence 

1  Survey,  p.  47. 

2  Rural  Economy  of  Norfolk,  Vol.  I,  p.  68. 

290 


LANDLORDS    AND    TENANTS 

without  leases  in  the  East  Riding  of  Yorkshire, 
"where  a  lease  was  never  asked  for,  probably 
never  wished  for,"  because  the  tenants  were 
"equally  secure"  when  holding  their  farms  from 
year  to  year.1  In  Staffordshire  the  conditions 
were  much  the  same.2  In  Derbyshire,  the  Duke 
of  Devonshire  granted  no  leases,  "but  owing  to 
his  fair  treatment  of  tenants"  improvements  were 
carried  on  extensively ;  but  the  other  landlords  of 
the  county  were  not  able  to  inspire  such  confi- 
dence.3 Arthur  Young,  who  was  the  champion 
of  long  leases,  laid  down  the  general  rule,  that 
upon  rich  soils  where  no  improvements  are  nec- 
essary, "the  want  of  leases  cannot  be  material ;  but 
where  liming,  marling,  draining,  fencing,  etc.,  are 
demanded,  the  want  of  a  lease  will  often  be  the 
want  of  the  improvements."4 

But  while  "tenancy  at  will"  or  "from  year  to 
year"  was  quite  satisfactory  where  no  improve- 
ments were  to  be  made,  or  where  the  landlords 
were  able  to  win  the  confidence  of  their  tenants, 
the  surveyors  reported  quite  generally  that  the 
security  of  long  leases  was  necessary  to  induce  the 
farmers  to  carry  on  the  needed  improvements. 
In  remarking  upon  the  lack  of  security  to  the 
investments  of  tenants  in  England,  at  that  time, 
James  Anderson  says  "an  unprejudiced  person, 

1  Survey,  p.  72. 

2  Ibid.,  p.  31- 
8  Ibid.,  p.  35- 

*Ibid.,  Lincolnshire,  pp.  57-60. 

291 


AGRICULTURAL    ECONOMICS 

who  should  attentively  consider  the  whole  system 
of  conduct  pursued  by  landed  proprietors,  and 
the  ideas  that  in  general  prevail  in  this  respect, 
would  believe  that  agriculture  was  an  employment 
which  it  was  deemed  to  be  a  good  policy  to  re- 
press above  all  others/'1 

John  Tuke,  who  for  many  reasons  favored 
the  letting  of  land  from  year  to  year,  says  in  his 
report  on  the  North  Riding  of  Yorkshire :  "Ex- 
perience, nevertheless,  teaches  us,  that  under  some 
landlords,  especially  those  in  straitened  circum- 
stances, ....  or  where  considerable  improve- 
ments are  to  be  made  at  the  expense  of  the 
tenants,  it  is  more  advisable  to  be  under  greater 
certainty,  though  attended  with  greater  rent."2 
The  desirability  of  increasing  the  number  of 
twenty-one-year  leases  in  the  West  Riding  of 
Yorkshire  was  stated  very  forcibly  by  Robert 
Brown,  who  believed  that  without  long-term 
leases  improvements  could  not  be  made.3  In 
Derbyshire  improvements  were  thought  to  be 
much  retarded  because  the  tenants  lacked  the  se- 
curity of  long  term  leases.4  In  Lincolnshire, 
where  leases  for  a  term  of  years  were  very  rare, 
it  was  generally  believed  that,  while  improve- 
ments had  been  carried  forward  fairly  well,  long- 
term  leases  would  result  in  much  greater  improve- 

1  Agriculture,  Vol.  3,  p.  92. 

8  Survey,  p.  55. 

8  Ibid.,  p.  30. 

'Ibid.,  Vol.  Ill,  p.  638. 

292 


LANDLORDS    AND    TENANTS 

ment.1  In  Leicestershire,  the  yeomen  farmers 
were  improving  their  lands,  but  the  tenant 
farmers  were  slow  to  make  improvements  owing 
to  the  lack  of  long-term  leases.  It  was  said  that 
•while  in  many  cases  the  present  landlords  could 
be  trusted  by  the  farmers,  the  estates  might 
change  hands  at  any  time  and  that  a  new  lord 
usually  meant  a  different  ordering  of  affairs. 
The  phrase,  "New  lords,  new  laws,"  was  current 
in  Leicestershire.2  In  1784,  William  Marshall 
was  of  the  opinion  that,  in  the  midland  counties, 
it  was  of  little  importance  whether  land  was  held 
under  a  lease  for  a  term  of  years,  or  from  year  to 
year, — such  was  the  confidence  of  the  tenantry  in 
the  landlords.  An  instance  is  given  of  a  young 
man  who  held  a  large  farm  from  year  to  year,  and 
who  proceeded  to  improve  the  land  in  various 
ways.  Five  years  later  the  following  note  was 
added  to  the  earlier  statement:  "Unfortunately 
for  the  tenant,  in  this  instance,  his  farm  is  now  on 
sale,  and  the  very  expensive  improvements  which 
he  has  been  making,  are,  probably,  in  a  great 
measure  sunk."3 

It  was  thought  that  farmers  would  be  more 
enterprising  in  Shropshire,  if  more  leases  were 
granted.4  In  Worcestershire,  it  was  believed, 
both  by  the  landlords  and  by  the  tenants, 

1  Survey,  p.  57. 

2  Ibid.,  p.  341. 

8  Rural  Economy  of  the  Midland  Counties,  Vol.  II,  p.  52. 
4  Survey,  p.  137. 

293 


AGRICULTURAL    ECONOMICS 

that,  where  improvements  were  to  be  made,  a 
lease  for  a  term  of  years  was  necessary.1  John 
Priest,  the  author  of  the  Buckinghamshire  Sur- 
vey, made  a  plea  for  long  leases,  especially  where 
improvements  were  to  be  made.2  In  Cambridge- 
shire, where  most  of  the  farms  were  held  on  yearly 
tenures  the  lack  of  certainty  of  tenure  was  much 
felt.3  In  general  the  tendency  was  for  the  tenant 
farmers  who  held  their  farms  from  year  to  year, 
to  adhere  to  the  old  customs  and  to  attempt  no 
new  improvements ;  for  the  saying : 

He  that  havocs  may  sit, 
He  that  improves  must  flit, 

expressed  a  common  belief  among  the  tenant 
farmers  of  that  day  who  held  their  land  from 
year  to  year.4  The  farmers  and  the  rural  econo- 
mists of  the  time  were  quite  generally  agreed  that 
the  adoption  of  long-term  leases  throughout  the 
land  was  essential  to  the  introduction  of  the  de- 
sired improvements  in  agriculture.5 

The  long-term  lease  of  one  hundred  years  ago 
reached  its  highest  degree  of  perfection  in  the 
county  of  Norfolk.6  The  two  main  objects  to  be 
secured  by  the  covenants  of  the  lease  were :  first, 
to  guarantee  to  the  tenant  the  continued  posses- 

1  Survey,  p.  38. 

2  Ibid.,  p.  83. 
8  Ibid.,  p.  38. 

*  R.  E.  Prothero,  English  Farming,  p.  58. 
'Hunter's  Georgicol  Essays,  (1804),  Vol.  6,  Essay  XXXVI. 
'See  Appendix  to  Chapter  XIII,  for  Mafsba-H's  description 
of  the  Norfolk  fease. 

294 


LANDLORDS    AND    TENANTS 

sion  of  the  farm  for  a  period  sufficiently  long  to 
encourage  investments  in  improvements,  espe- 
cially such  improvements  as  are  made  in  and  upon 
the  soil  by  careful  tilth  and  by  the  addition  of 
artificial  fertilizers,  and  second,  to  secure  the  land- 
lord against  improper  use  of  the  property  during 
the  last  few  years  of  the  tenancy  so  that  the  farm 
would  be  returned  to  the  landlord  in  good  con- 
dition. "No  department  of  the  management  of 
an  estate  gives  more  uneasiness  to  both  landlord 
and  tenant,"  says  Marshall,  "than  do  removals, 
or  exchanges  of  tenants;  and  every  covenant 
which  facilitates  this  unpleasant  business  is 
valuable."1 

In  the  Norfolk  leases  the  greater  number  of  the 
covenants  which  restrict  the  farmer  in  his  opera- 
tions, pertain  to  the  last  three  years  of  the  ten- 
ancy. This  was  true  to  a  greater  or  less  extent 
in  the  other  counties  where  long  term  leases  were 
in  use.  This  method  of  laying  down  restrictions 
seems  to  have  been  based  on  the  belief  that  the 
interest  of  the  tenant  would  lead  him  to  farm  in 
accordance  with  the  rules  of  good  husbandry  until 
the  last  few  years  of  the  tenancy,  at  which  time  he 
could  increase  his  own  profits  by  exhausting  the 
soil  and  leaving  the  farm  in  bad  condition  for  the 
incoming  tenant. 

We  wish  to  call  especial  attention  to  a  cove- 
nant given  by  Marshall  as  found  in  the  Norfolk 

1  Rural  Economy  of  Norfolk,  second  edition,  Vol.  I,  p.  69. 
295 


AGRICULTURAL    ECONOMICS 

leases,  which  forbids  the  taking  of  more  than  two 
grain  crops  without  a  whole  year's  fallow,  a  crop 
of  turnips,  or  "a  two  years'  lay."  Writing  nine 
years  later  than  Marshall  (1804),  Arthur  Young 
gives  the  following  clause  among  "new  cove- 
nants" in  use  in  the  county  of  Norfolk.  The 
tenant  "shall  not  sow  any  of  the  lands  with  two 
successive  crops  of  corn,  grain,  pulse,  rape  or  tur- 
nips for  seed,"1  without  the  consent  of  the  land- 
lord. The  rule  that  two  grain  crops  should  not 
be  grown  in  succession  on  the  same  piece  of  land 
became  an  established  custom  in  most  of  the 
grain-growing  districts  of  England.  This  rule 
was  in  harmony  with  the  Norfolk  four-course 
system  of  crop  rotation.  In  this  four-course  sys- 
tem, a  fallow  crop,  that  is  a  cultivated  crop,  usu- 
ally a  root  crop,  is  followed  by  a  crop  of  spring 
grain  with  which  clover  or  grass  seeds  are  sown. 
After  harvesting  the  hay  the  next  season,  the 
field  is  plowed  and  put  into  condition  for  fall 
grain  which  is  the  fourth  crop  in  the  course.  For 
more  than  a  century  this  system  has  been  the  most 
highly  approved  of  all  systems  of  crop  rotation  in 
use  in  England.  This  same  system  was  intro- 
duced into  Germany  by  Albrecht  Thaer. 

A  study  of  the  leases  in  use  in  the  various 
counties  of  England  at  the  close  of  the  Eighteenth 
Century,  does  not  give  so  favorable  an  impression 
as  do  the  descriptions  of  the  Norfolk  system. 

1  Agriculture  of  Norfolk,  p.  50. 
296 


LANDLORDS    AND    TENANTS 

The  limitations  and  restrictions  as  to  the  crops 
which  could  be  grown,  and  as  to  the  system  of 
crop  rotation,  were  often  of  such  a  character  as 
to  make  them  injurious  to  the  interests  of  the 
farmers.  These  regulations  were  likely  to  be  of 
such  a  character  as  would  make  it  impossible  for 
the  farmers  to  adjust  their  farming  to  the  de- 
mands of  the  times.  In  the  Vale  of  Gloucester, 
for  example,  where  nearly  all  of  the  land  was  as 
yet  in  the  common  fields,  the  tenants  were  re- 
quired "to  fallow  the  arable  land,  every  third  or 
fourth  year;  according  to  the  established  course 
of  husbandry  of  the  township."  And  again,  "not 
to  sow  hemp,  flax,  or  rape  seed  on  any  part  of  the 
premises.  Nor,  otherwise,  to  cross-crop;  but  to 
sow  the  same  corn  and  grain,  from  year  to  year, 
according  to  the  best  and  most  usual  course  of 
husbandry  used  in  the  respective  townships."1 

In  writing  on  the  subject  of  the  restricting 
clauses,  generally  found  in  the  leases  of  his  time, 
Robert  Brown  says :  "The  restrictions  imposed 
during  the  time  he  occupies  his  farm,  prevent  the 
farmer  from  changing  his  management,  or  of 
adapting  his  crops  to  the  nature  of  the  soil  he 
possesses.  Agriculture  is  a  living  science  which 
is  progressively  improving,  consequently  what 
may  be  esteemed  a  good  course  of  cropping  at  one 
time,  may,  from  experience  and  observation,  be 

*W.  Marshall,  Rural  Economy  of  Gloucestershire,  Vol.  I, 
p.  25. 

297 


AGRICULTURAL    ECONOMICS 

afterwards  found  defective  and  erroneous.  That 
particular  covenants  in  a  lease  are  obstacles  to 
improvements  cannot  be  disputed;  for  the  very 
nature  of  a  covenant  supposes  that  the  practise  to 
be  regulated  by  it  had  arrived  at  its  ne  plus  ultra, 
and  could  not  be  mended.  These  covenants  or 
restrictions  subsist  more  or  less  irf  every  lease  we 
heard  of;  and  the  shorter  the  lease  the  more  nu- 
merous they  are.  .  .  .  General  rules  of  manage- 
ment are  very  proper  in  leases,  such  as,  to  keep  the 
farm  in  good  order,  to  consume  all  the  straw 
raised  upon  it,  and  to  sell  no  dung.  These  restric- 
tions we  will  allow;  and  every  good  farmer  will 
follow  them  whether  he  is  bound  to  do  so  or  not. 
Nay,  we  will  go  farther — if  leases  of  a  proper 
duration  were  granted,  it  is  very  reasonable  that 
the  property  of  the  landlord  should  be  protected 
by  restricting  clauses  for  the  three  years  previous 
to  their  expiration.  But  after  all,  it  will  be  found 
that  no  clause  can  be  inserted,  besides  the  general 
ones  already  mentioned,  that  will  serve  to  enhance 
the  value  of  the  land,  except  obliging  the  farmer 
to  leave  a  proportional  quantity  of  such  land  in 
grass  at  the  expiration  of  the  lease,  and  specifying 
the  manner  in  which  that  land  is  to  be  sown  down. 
Other  clauses  serve  only  to  distress  the  farmer, 
but  will  never  promote  the  interests  of  the  land- 
lord."1 

All  the  agricultural  writers  of  the  time  were  by 

1  Agricultural  Survey,  W .  R.  Yorkshire,  pp.  42-44. 
298 


LANDLORDS    AND    TENANTS 

no  means  in  full  agreement  with  Robert  Brown  in 
his  views  on  the  subject  of  leases.  Leases  seem 
to  have  been  in  best  repute  in  the  eastern  counties, 
where  they  were  usually  for  a  term  of  twenty-one 
years.  Mr.  Bailey  is  quoted  as  saying,  in  crit- 
icism of  Mr.  Brown's  position  as  stated  above, 
that,  "if  the  proprietors  of  land  were  sure  of  al- 
ways getting  tenants  that  would  act  properly  there 
would  be  no  need  of  restricting  covenants;  but 
this  is  not  always  the  case,  and  there  are  many 
instances  of  estates  being  much  injured  by  ex- 
hausting crops  where  tenants  were  not  properly 
restricted.  That  many  covenants  are  useless  or 
hurtful  I  readily  admit;  but  covenants  may  be 
so  framed,  that  a  tenant  shall  have  ample  liberty 
to  take  such  crops  as  he  shall  think  proper,  and  to 
propose  such  modes  as  shall  benefit  himself  with- 
out injuring  his  landlord."1 

It  was  quite  generally  agreed  that  long  leases 
properly  drawn,  were  extremely  desirable  from 
the  standpoint  of  the  farmer,  wherever  improve- 
ments were  to  be  made.  But  the  landlords  were 
not  so  generally  of  the  opinion  that  long  term 
leases  were  a  good  thing.  Many  landlords 
claimed  that  it  made  the  tenants  too  independ- 
ent.2 But  a  more  important  objection  was 
found  in  the  fact  that  while  a  lease  of  sufficient 

1  Agricultural  Survey,  W.  R.  Yorkshire,  p.  50. 

2  Staffordshire,  Survey,  p.  30 ;  Leicestershire  Survey,  pp.  51- 
52 ;  NortkarHptonshire  Survey,  p.  45. 

299 


AGRICULTURAL    ECONOMICS 

length  would  enable  the  tenant  to  make  improve- 
ments, it  was  hard  to  arrange  matters  so  that  the 
tenants  would  not  exhaust  the  land  at  the  end  of 
the  tenancy.  It  often  happened  that  a  tenant 
would  bring  the  land  into  good  tilth  and  to  a  high 
degree  of  fertility  during  the  early  years  of  his 
tenancy,  and  then  take  as  nearly  everything  out 
of  it  as  possible  during  the  last  few  years  of  the 
lease. 

Another  objection  to  the  granting  of  leases  for 
long  terms  became  quite  general  between  1790 
and  1815.  The  landlords  objected  that  as  a 
result  of  rising  prices  during  the  period  covered 
by  the  leases,  they  sustained  great  losses.  It  was 
maintained  by  the  landlords  of  Surrey,  for  exam- 
ple, that  by  letting  land  for  a  term  of  fourteen  or 
twenty-one  years  or  any  longer  period,  the  owners 
of  the  land  actually  received,  "almost  every  year 
during  the  currency  of  the  lease,  and  certainly  in 
the  latter  years  of  it,  a  less  rent  than  he  did  at 
the  commencement,  from  the  depreciation  in  the 
value  of  money."1  And  for  this  reason  the  land- 
lords were  objecting  to  the  granting  of  leases. 
Even  in  the  county  of  Norfolk,  where  the  twenty- 
one  year  lease  had  proved  so  beneficial,  the  land- 
lords objected  to  long  leases  because  it  so  often 
happened  that  soon  after  a  farm  was  rented  the 
prices  of  agricultural  produce  would  rise  so  much 
higher  than  when  the  lease  was  taken,  that  the 

1 W.  Stevenson,  Agriculture  of  Surrey,  p.  98. 
300 


LANDLORDS    AND    TENANTS 

tenants  were  "under-rented"  for  a  series  of  years.1 
The  basis  for  complaint  on  this  ground  is  shown 
by  the  fact  that  the  average  price  of  wheat  was 
about  twice  as  high  for  the  five  years  from  1809 
to  1813  as  for  the  five  years  from  1790  to  I794.2 
A  statement  of  the  tenant  problem  and  the  solu- 
tion proposed  by  an  eminent  rural  economist  of 
the  time  will  be  interesting  in  this  connection. 
In  his  work  on  Landed  Estates,  published  in  1806, 
William  Marshall  reviews  the  existing  forms  of 
land  tenure.3  "The  tenant  holding  at  will"; 
"holding  from  year  to  year,  under  a  written  agree- 
ment, with  specified  covenants";  "leases  for  a 
term  of  years,  as  seven,  fourteen,  twenty-one,  or 
greater  number  of  years" ;  and  says : 

Objections  are  urged  against  each  of  these  species  of 
tenancy.  The  depreciation  of  the  circulating  value  of 
money,  and  the  consequent  nominal  rise,  in  the  rental  value 
of  lands,  has  rendered  long  leases  greatly  disadvantageous 
to  proprietors :  while  annual  holdings  are  not  only  discour- 
aging to  tenants ; — especially  to  men  of  exertion  and  capital 
— but  are  a  bar  to  the  improvement,  and  a  clog  on  the  pros- 
perity of  an  estate:  beside  being,  in  the  first  instance,  un- 
friendly to  the  interests  of  proprietors;  inasmuch  as  they 
lower  the  fair  rental  values  of  their  lands. 

Some  years  ago,  on  perceiving  the  antipathy  which  had 
gone  forth  among  men  of  fortune,  against  granting  leases 
for  long  terms,  and  being  well  aware  of  the  disadvantages 
of  annual  holdings,  it  occurred  to  me  that  agreements  for 
occupying  from  three  years  to  three  years,  instead  of  from 
year  to  year,  would  be  an  eligible  species  of  tenancy :- 

1  Marshall,  Rural  Economy  of  Norfolk,  Vol.  I,  p.  67. 

2  Prothero,  English  Agriculture,  Appendix  I. 
a  Pp.  378  to  382. 


AGRICULTURAL    ECONOMICS 

which  is  the  same  thing,  granting  leases  for  six  years  cer- 
tain; with  a  condition  that  if  neither  party  give  notice  to 
quit,  before  the  expiration  of  the  first  three  years,  then  the 
term  to  be  prolonged  to  nine  years;  and  so  on,  from  three 
years  to  three  years  ....  until  three  years  after  notice  has 
been  duly  given,  by  either  party  to  the  other. 

This  gives  room  for  a  tenant  "to  turn  his  hand  in,"  and 
a  loose  to  his  exertions.  He  has,  in  reality,  a  fresh  lease  of 
six  years  granted  him,  every  third  year.  This  is  sufficient 
to  encourage  him  to  keep  his  lands,  continually,  in  a  hus- 
bandlike  state.  And  if  he  execute  at  his  own  expense,  any 
of  the  higher  improvements,  such  as  [improving  waste 
lands,  etc.]  it  is  but  reasonable  that  he  should  have,  when- 
ever he  may  quit  his  farm,  an  equitable  remuneration  for 
the  remainder  of  such  improvements.  Thus,  the  tenant  is 
placed  on  sure  ground.  He  may  till,  manure,  and  improve, 
with  much  the  same  confidence,  as  if  the  lands  in  his  occu- 
pation were  his  own  property. 

In  return  for  such  advantages,  the  tenant  cannot  re- 
fuse to  covenant,  that,  during  the  last  three  years  of  his 
term,  he  will  manage  his  farm  in  a  husbandlike  manner, 
and,  at  the  end  of  the  term,  will  leave  it  in  such  a  state  of 
cultivation  and  repair,  as  will  induce  a  good  tenant  to  take 
it,  at  a  full  rent ; — or  suffer  the  proprietor  to  put  it  in  such 
a  state,  at  his  (the  outgoing  tenant's)  expense. 

An  estate  which  is  under  lease,  on  these  principles,  and 
under  attentive  management,  cannot  be  let  down  to  an  un- 
profitable state.  It  must  continually  remain  under  a 
regular  course  of  husbandry,  and  in  a  state  of  cultivation 
and  repair.  If  the  acting  manager  do  his  duty,  even  the 
changing  of  tenants  cannot  interrupt  its  prosperity.  The 
incoming  tenant  (under  attentive  management)  steps  into 
his  farm,  with  the  advantages  that  he  would  have  enjoyed, 
had  it  been  under  his  own  direction  for  the  three  preceding 
years. 

But,  with  a  lease  on  this  principle,  and  with  a  proper 
choice -of  tenants,  removals  can  rarely  happen.  What  super- 
intendent, who  knows  the  difficulty  of  procuring  a  good 
tenant,  would  wish  to  discharge  him?  And  no  such  tenant 
302 


LANDLORDS    AND    TENANTS 

will  readily  leave  the  farm  he  is  settled  upon,  if  he  find 
proper  treatment.  Even  should  notice  be  given,  in  conse- 
quence of  any  misunderstanding  between  the  parties,  three 
years  allow  time  for  reflection;  and,  before  they  expire,  re- 
sentment may  die  away,  and  cordiality  be  restored.  If, 
however,  either  party  remain  dissatisfied,  he  has  an  easy 
way  of  dissolving  the  connection.  Or  if  a  proprietor  or  a 
superintendent  is  desirous  to  make  fresh  arrangements  on 
an  estate ;  or  to  regulate  its  rent  roll,  by  the  existing  value 
of  money ;  he  need  not  wait  many  years  to  fulfill  his  desire. 
For  if  the  tenant  in  occupancy  will  not  agree  to  pay  a  fair 
rent,  he  has  three  years  before  him  to  choose  one  who  will ; 
— another  valuable  advantage  of  the  tenancy  proposed. 

Thus,  a  lease  on  this  principle  has  a  decided  preference 
by  a  proprietor,  to  long  leases.  And  its  advantage  over  an- 
nual holdings  is  not  less  considerable.  The  lands  of  an 
estate  are  well  worth  from  five  to  ten  -per  cent,  more,  to  a 
tenant,  under  the  former,  than  under  the  latter,  tenancy. 
So  that,  beside  the  conveniences  mentioned,  a  proprietor 
may  be  immediately  adding  very  considerably  to  his  in- 
come, by  this  principle  of  management. 

This  species  of  tenancy  I  have  had  the  happiness  of 
being  the  means  of  introducing,  upon  some  considerable 
estates,  in  England,  in  Wales,  and  in  Scotland;  with,  I 
believe,  the  mutual  satisfaction  of  the  men  of  fortune  who 
possess  them,  and  of  their  tenants. 

•  While  this  system  proposed  by  Marshall  might 
solve  the  problem  of  adjusting  the  amount  of  rent 
to  changes  in  real  rental  values,  and  while  it 
might  encourage  the  tenant  to  make  such  im- 
provements as  he  could  realize  upon  in  three 
years,  it  had  laid  down  no  scheme  for  determin- 
ing the  value  of  unexhausted  improvements,  and, 
indeed,  does  not  even  propose  that  a  tenant 
shall  have  remuneration  for  the  investments  made 
303 


AGRICULTURAL    ECONOMICS 

upon  the  land  during  the  last  three  years,  and  on 
which,  if  he  farms  in  a  husbandlike  manner,  he 
cannot  realize  all  of  the  benefit.  Thus  it  seems 
that  Marshall  failed  to  solve  the  most  permanent 
difficulty  which  the  tenant  problem  presented; 
for  the  unsettled  condition  of  the  money  market 
became  less  important  in  the  course  of  time,  while 
the  problem  of  unexhausted  improvements  has 
been  of  increasing  importance  as  the  years  have 
gone  by. 

Various  methods  were  devised,  in  different 
parts  of  England,  for  keeping  the  tenants  from 
leaving  the  land  in  an  exhausted  condition  at  the 
termination  of  their  leases.  It  was  the  custom  on 
one  estate  in  Shropshire  to  lease  the  land  for 
twenty-one  years  "certain,"  and  for  seven  years 
more  at  the  option  of  the  landlord.  At  the  end 
of  the  twenty-one-year  period,  a  new  contract  of 
the  same  kind  might  be  entered  into,  if  terms 
could  be  agreed  upon,  or  the  tenancy  might  be 
brought  to  a  close,  but  the  important  condition 
was  that  if  the  tenant  had  reduced  the  land  to  a 
very  low  degree  of  fertility  he  could  be  forced  to 
keep  the  farm  for  seven  years  longer  at  the  old 
rent.  Even  if  this  system  had  succeeded  in  pro- 
tecting the  landlord,  it  failed  even  to  recognize 
the  right  of  the  tenant  to  unexhausted  improve- 
ments. 

The  system  which  subsequent  history  has 
shown  to  be  the  most  effective  means  of  keeping 
304 


LANDLORDS    AND    TENANTS 

the  farmers  from  exhausting  the  land  during  the 
last  few  years  of  the  tenancy,  is  that  reported  in 
the  Yorkshire  Survey.  The  system  was  that  of 
granting  remuneration  to  the  retiring  tenant  for 
all  his  investments  on  which  time  had  not  yet 
allowed  him  to  realize  their  full  returns ;  the  ten- 
ant was  then  left  free  to  farm  as  he  pleased  so 
long  as  he  conformed  to  the  rules  of  good  hus- 
bandry. One  of  the  examples  of  this  system  is 
as  follows : 

The  landlord  covenants  to  allow  the  tenant,  on  quitting 
his  farm,  what  two  indifferent  persons  shall  deem  reason- 
able, for  what  is  generally  called  full  tillage  and  half  tillage, 
being  for  the  rent  and  assessment  of  his  fallow  ground,  the 
plowing  and  the  management  of  the  same ;  the  lime,  manure, 
or  other  tillage  laid  thereon ;  the  seed  sown  thereupon ;  the 
sowing  and  harrowing  thereof ;  also  for  the  sowing,  harrow- 
ing, manuring,  and  managing  any  turnip  fallow  which  he 
may  leave  unsown ;  also  for  any  clover  seed  sown  on  the 
premises;  and  harrowing  and  rolling  in  of  such  seed;  and 
for  every  other  matter  and  thing  done  and  performed  in  a 
husbandrylike  manner  on  such  fallow  lands,  in  the  two  last 
years  of  the  term ;  also  for  the  last  year's  manure  left  upon 
the  premises ;  and  for  any  manure  and  tillage  laid  upon  the 
grass  land.1 

During  the  period  of  rising  prices  prior  to 
1812,  the  farmers  were  anxious  to  rent  land  on 
long  leases.  It  is  said  that  at  that  time,  "good 
tenants  always  wanted  leases,"  that  "they  were 
galloping  after  one  another  to  take  leases  at  any 
rent."2  After  the  close  of  the  Napoleonic  wars, 

1  W.  R.  Yorkshire,  p.  40. 

2  Parliamentary  Papers,   1833,  Vol.  V,  questions  7420  and 
8462. 

20  305 


AGRICULTURAL    ECONOMICS 

prices  fell  back  almost  to  their  old  level.  The 
average  price  of  wheat  was  just  about  half  as 
high  for  the  five  years  from  1821  to  1825,  as  for 
the  five  years  from  1809  to  1813.  With  this  fall 
in  prices  the  farmers  became  even  more  averse  to 
the  taking  of  long  leases  than  the  landlords  had 
previously  been.  One  after  another  the  wit- 
nesses before  the  Parliamentary  Committee  on 
Agriculture,  in  1833,  bore  testimony  to  the  fact 
that  the  farmers  were  objecting  seriously  to  tak- 
ing long  leases,  because  they  did  not  know  how 
soon  they  might  be  unable  to  pay  the  rent,  as  their 
capacity  to  pay  the  rent  depended  upon  such  un- 
certain prices.  The  farmers  were  in  doubt  as  to 
how  much  protection  they  were  to  have  from  the 
competition  of  foreign  producers.  But  without 
regard  to  this,  they  knew  that  the  prices  of  agri- 
cultural products  had  been  falling  for  several 
years  in  succession  and  they  were  unable  to  tell 
when  the  limit  would  be  reached. 

With  depressed  prices  the  landlords  found  new 
reasons  for  objecting  to  long  leases.  This  was 
the  time,  one  might  think,  for  the  landlords  to 
regain  what  they  had  lost  during  the  period  of 
rising  prices,  but  they  found  it  rarely  happened 
that  the  tenants  were  able  to  stand  the  losses  in- 
curred by  falling  prices.  The  farmer  could  not 
be  forced  to  live  up  to  his  contract,  if  he  was 
losing  money.  It  was  said  that  leases  were  bind- 
ing upon  the  landlords  but  not  upon  the  tenants. 

306 


LANDLORDS    AND    TENANTS 

The  fall  in  prices  seemed  to  demoralize  the 
farmers,  so  that  the  landlord  was  never  certain 
that  his  tenant  would  not  disregard  the  contract 
in  case  of  a  fall  in  prices,  whereas  the  tenant 
would  certainly  remain  to  reap  the  benefits  in  case 
of  a  rise  in  prices. 

The  remedy  which  was  often  prescribed  for  the 
evils  of  fluctuating  prices,  was  the  introduction 
of  "corn  rents."1  By  this  it  is  not  meant  that  the 
farmer  was  to  give  a  certain  share  of  his  crop  to 
the  landlord  as  rent,  but  that  he  should  pay  as  rent 
the  value  of  a  certain  fixed  amount  of  grain. 
The  rent  was  figured  on  the  basis  of  what  was 
called  in  Scotland  the  "fiars  prices  of  the  county." 
In  Scotland  the  sheriff  of  each  county  was  bound 
to  summon  a  jury  once  each  year  to  examine 
on  oath,  a  number  of  witnesses,  such  as  farm- 
ers, grain  dealers,  brewers,  etc.,  and  accord- 
ing to  the  evidence  thus  obtained,  to  fix  the 
"fiars  prices"  of  the  different  grades  of  grain. 
This  system  was  quite  generally  resorted  to  in 
Scotland  during  the  period  of  falling  prices. 
Corn  rents  were  advocated  by  the  English  rural 
economists  of  the  time,  and  were  introduced  with 
success  in  a  few  instances  in  the  western  counties ; 
but  this  system  failed  to  gain  general  favor  among 
the  farmers  and  landlords  of  England.2 

1  Parliamentary    Papers,    1833,    Vol.    V,    questions  2594-96 ; 
2601-2609. 

2  Ibid.,   questions   328   to   331;    347;    10438;    10448;    10454; 
I059I-95- 

307 


AGRICULTURAL    ECONOMICS 

The  use  of  long  leases  declined  rapidly  in  Eng- 
land during  the  period  following  the  close  of  the 
continental  wars.  In  those  counties  where  they 
had  been  most  numerous  and  most  beneficial,  the 
farmers  came  to  prefer  short  leases  or  even  ten- 
ancy from  year  to  year.  The  long  lease  as  a 
means  of  solving  the  tenant  problem  had  been 
"weighed  in  the  balances  and  found  wanting." 
Yet  it  must  be  admitted  that  long  leases  had  done 
a  great  deal  of  good  in  promoting  improvements 
in  English  agriculture  and  now  that  the  prices  of 
agricultural  products  were  depressed  the  farmers 
did  not  find  it  profitable  to  farm  their  lands  so 
intensively  as  formerly  even  if  they  had  long  term 
leases.  Thus,  the  tenant  problem  was  of  less 
importance  in  the  minds  of  the  farmers  for  a 
series  of  years,  until  the  return  of  prosperity  again 
raised  the  question  of  investments  in  improve- 
ments and  the  means  of  securing  just  returns 
upon  such  investments. 

The  period  from  1836  to  1875  was  one  of  gen- 
eral prosperity  for  English  farmers,  and  by  1850 
the  tenant  problem  was  receiving  the  attention  of 
Parliament.  The  use  of  long  leases  had  gradu- 
ally declined  during  the  first  half  of  the  Nine- 
teenth Century,  and  while  there  were  agricultural 
economists  who  still  advocated  this  means  of  se- 
curing to  the  farmers  legitimate  returns  upon 
their  investments,  there  was  a  very  prevalent  dis- 
like to  long  leases  on  the  part  of  both  parties  con- 
308 


LANDLORDS    AND    TENANTS 

cerned.  Yet  it  was  generally  recognized  that 
security  to  the  tenant's  investments  was  essential 
to  the  promotion  of  that  degree  of  intensity  of 
culture  which  was  most  profitable  in  the  long  run 
both  to  the  tenant  and  to  the  landlord.1 

The  long  period  lease  had  proved  so  unsatisfac- 
tory that  especial  attention  was  now  given  to  the 
perfecting  of  the  "year  to  year"  agreement.  The 
custom  of  "tenant-right,"  which  had  proved  sat- 
isfactory in  Lincolnshire,  formed  the  basis  for 
the  hope  that  tenants  holding  their  farms  from 
year  to  year  might  be  given  that  degree  of  security 
which  would  promote  good  agriculture. 

The  introduction  of  agricultural  improvements 
came  rather  later  in  Lincolnshire  than  in  many 
other  parts  of  England,  but  when  the  transition 
did  come  it  was  "rapid  and  striking,  perhaps  more 
so  than  in  any  other  county  in  England."2  These 
improvements  were  made,  too,  without  the  pro- 
tection of  long  time  leases.  They  were  made 
under  the  protection  of  the  Lincolnshire  system 
of  tenant-right.  "It  was  very  fortunate,"  says 
Gaird,  "that  when  the  time  for  [the  introduction 
of  agricultural  improvements]  arrived,  the  lead- 

*To  avoid  the  necessity  of  making  specific  references  in 
great  numbers  it  will  simply  be  stated  that  the  discussion  of 
this  period  is  based  upon  a  Parliamentary  Report  on  Agricul- 
tural Customs,  Parliamentary  Papers,  1847-8,  Vol.  VII;  and 
Caird's  English  Agriculture  in  1850  and  1851.  In  these 
sources  the  material  here  used  is  indexed  under  "tenant- 
right." 

2Caird,  English  Agriculture,  p.  194. 

309 


AGRICULTURAL    ECONOMICS 

ing  landlords  [of  Lincolnshire]  were  liberal  and 
intelligent  men.  .  .  .  They  saw  the  advantage  of 
encouraging  tenants  to  embark  their  capital 
freely;  and  as  leases  were  not  the  fashion  of  the 
county,  they  gave  them  that  security  for  their 
invested  capital,  which  is  termed  'tenant-right,' 
or  compensation  for  unexhausted  improvements. 
Though  this  tenant-right  may  not  be  a  strictly 
legal  claim,  it  is  universally  admitted  in  Lincoln- 
shire, the  landlord  paying  it  when  a  farm  falls 
into  his  own  hands,  and  refusing  to  accept  a  ten- 
ant who  declines  to  comply  with  the  custom.  It 
varies,  however,  considerably  in  the  different  parts 
of  the  county,  and  appears  to  have  enlarged  in 
its  obligations  with  the  greater  development  of 
agricultural  improvements.  In  North  Lincoln- 
shire, the  usual  allowances  claimed  by  the  outgo- 
ing from  the  incoming  tenant,  include  draining, 
marling,  chalking,  claying,  lime,  bone,  guano, 
rape  dust  and  oil-cake.  The  following  is  the  scale 
on  which  these  allowances  are  usually  made : 

When  the  landlord  has  found  tiles,  and  the  tenant  has 
done  the  labor,  if  done  within  twelve  months  before  the  end 
of  the  tenancy  and  no  crop  has  been  taken  from  land  after 
the  draining  thereof  is  completed  the  whole  cost  is  allowed. 
If  one  crop  has  been  taken  from  such  land,  three-fourths 
of  the  cost  are  allowed,  and  so  on,  diminishing  the  allowance 
by  one- fourth  for  each  crop  taken ;  but  this  allowance  is 
made  only  when  the  work  is  well  and  properly  done  by  the 
tenant,  to  the  satisfaction  of  the  landlord  or  his  agent,  ex- 
pressed in  writing.  For  marling  or  chalking,  if  done  with- 
in twelve  months  before  tfoe  end  of  the  tenancy,  the  whole 
310 


LANDLORDS    AND    TENANTS 

cost  is  allowed ;  for  that  done  in  the  previous  year,  seven- 
eighths  of  the  cost  are  allowed ;  and  so  on,  diminishing  the 
allowance  by  one-eighth  for  each  year  that  shall  have 
elapsed  since  the  marling  or  chalking. — For  lime  used 
within  twelve  months  before  the  end  of  the  tenancy,  if  no 
crop  has  been  taken  from  the  land  limed  in  that  year,  the 
whole  cost,  including  labor,  is  allowed ;  if  one  crop  has  been 
taken  from  such  land,  four-fifths  of  the  cost  are  allowed ; 
and  so  on,  diminishing  the  allowance  by  one-fifth  for  each 
crop  taken  from  such  land. — For  claying  on  light  land,  a 
similar  allowance  to  that  for  lime. — For  bones  used  within 
twelve  months  before  the  end  of  the  tenancy  two-thirds  of 
the  cost  are  allowed,  and  for  those  used  in  the  previous 
year  one-third  of  the  cost. — For  guano  and  rape  dust  used 
within  twelve  months  before  the  end  of  the  tenancy  for 
turnips  or  other  green  crop,  two-thirds  of  the  cost  are  al- 
lowed.— For  oil-cake  given  to  cattle  and  sheep  one-third  of 
the  cost  price  of  that  so  used  within  twelve  months  before 
the  end  of  the  tenancy,  and  one-sixth  of  the  cost  price  of 
that  so  used  in  the  previous  year  is  allowed. 

"The  amount  of  these  allowances  is  settled  by 
arbitration.  .  .  .  On  the  whole,  ....  the  system 
is  believed  to  have  worked  well."1 

The  custom  of  tenant-right  was  fully  recog- 
nized in  the  counties  of  Sussex,  Surrey,  and  Lin- 
coln, in  the  Weald  of  Kent,  in  the  northern  part 
of  Nottinghamshire,  and  in  the  West  Riding  of 
Yorkshire.  In  some  of  these  regions  the  system 
was  not  giving  very  good  results.  In  Surrey,  the 
custom  of  tenant-right  was  said  to  be  "promoting 
an  extensive  system  of  fraud  and  falsehood 
among  the  farmers."1  The  custom  seems  to  have 
been  quite  loosely  formulated  in  that  county,  and 

1Caird's  English  Agriculture  in  1850  and  1851,  pp.  194-5. 


AGRICULTURAL    ECONOMICS 

it  was  possible  for  the  farmers  to  "work  up  a 
quitting,"  as  it  was  called,1  and  thus  defraud  the 
landlord  or  the  succeeding  tenant.  Not  being 
properly  regulated  the  "compensation"  often  em- 
braced "large  payments  for  imaginary  improve- 
ments and  alleged  operations,  which,  even  if  they 
had  ever  been  performed  would  be  more  injurious 
than  beneficial."2 

But  while  the  custom  of  tenant-right  was  very 
imperfect  in  its  operations  in  some  parts  of  Eng- 
land, the  principle  on  which  it  was  based  was 
sound,  and  in  time  it  was  to  be  embodied  in  the 
laws  of  the  land.  The  custom  of  tenant-right 
struck  at  the  very  heart  of  the  tenant  problem. 
It  guaranteed  to  the  tenant  just  returns  for  his 
investments,  without  involving  the  many  disad- 
vantages of  the  long-period  lease.  The  experi- 
ence of  the  landlords  and  tenants  of  Lincoln- 
shire had  already  proved  that  where  the  system 
was  properly  regulated  the  custom  of  tenant-right 
was  satisfactory  in  practise  as  well  as  sound  in 
principle. 

In  1850,  a  bill  was  introduced  into  Parliament 
which  aimed  at  the  embodiment  of  this  custom 
of  tenant-right  into  a  law.  It  \vas  entitled  "A 
Bill  for  the  Improvement  of  the  Relation  between 
Landlord  and  Tenant  in  England  and  Wales." 
Its  purpose,  as  stated  in  the  preamble,  was  to 


English  Agriculture  in  1850  and  1851,  p.  119. 
2  Ibid.,  p.  119. 

312 


LANDLORDS    AND    TENANTS 

insure  to  farmers,  compensation  for  properly  con- 
structed, permanent  improvements.  The  idea  of 
enacting  a  law  of  this  kind  was  not  new  in  1850. 
Two  hundred  years  before,  Walter  Blith  advised 
that  a  law  be  enacted  "whereby  every  landlord 
should  be  obliged  ....  to  give  him  [the  tenant] 
reasonable  allowance  for  his  clear  improve- 
ments."1 The  bill  of  1850  did  not  pass,  but 
neither  did  it  die.  Again  and  again  similar  bills 
were  brought  before  Parliament,  and  in  1875  an 
act  was  passed,  which  laid  down  the  conditions 
for  compensating  the  outgoing  tenant,  but  unfor- 
tunately no  provision  was  then  made  to  keep  the 
landlords  from  requiring  the  tenants  to  contract 
themselves  out  of  the  right  to  claim  compensation 
under  the  law,  and  while  the  law  was  beneficial  in 
that  it  systematized  and  brought  greater  uni- 
formity into  the  practise  of  granting  compensa- 
tion where  tenant-right  was  recognized,  it  was  not 
generally  adopted.  The  author  of  the  bill,  even, 
asked  his  tenants  to  contract  themselves  out  of  the 
benefits  of  the  law  which  he  himself  had  framed. 
In  1883,  a  new  bill,  the  Agricultural  Holdings 
Act,  was  passed.  This  Act  contained  a  clause 
making  it  illegal  for  a  landlord  to  contract  him- 
self out  of  the  conditions  of  the  law.  The  law  of 
1883  with  the  slight  modifications  of  the  Amend- 
ing Act  of  1900,  is  still  in  force,  and  it  will  be 
worth  while  to  examine  it  with  considerable  care. 

1Thorald  Rogers,  Work  and  Wages,  p.  459. 
313 


AGRICULTURAL    ECONOMICS 

The  law  enables  the  tenant  farmers  to  obtain  from 
the  landlords  as  compensation  for  improvements 
at  the  termination  of  their  tenancies,  "such  sum 
as  fairly  represents  the  value  of  the  improve- 
ment to  an  incoming  tenant." 

The  improvements  for  which  compensation 
could  be  claimed  under  this  law  were  divided  into 
three  classes.  The  first  class  includes  all  those 
improvements  to  which  the  consent  of  the  land- 
lord is  required  if  the  payment  of  compensation  is 
to  be  enforced  by  law.  This  class  includes  the 
following  list  of  improvements : 

(1)  Erection  or  enlargement  of  buildings. 

(2)  Formation  of  silos. 

(3)  Laying  down  of  permanent  pasture. 

(4)  Making  and  planting  of  osier  beds. 

(5)  Making  of  water  meadows  or  works  of  irrigation. 

(6)  Making  of  gardens. 

(7)  Making  or  improving  of  roads  or  bridges. 

(8)  Making  or  improving  of  water  courses,  ponds,  wells 
or  reservoirs,   or  of  works   for  the   application   of  water 
power  or  for  supply  of  water  for  agricultural  or  domestic 
purposes. 

(9)  Making  or  removal  of  permanent  fences. 

(10)  Planting  of  hops. 

(n)  Planting  of  orchards,  or  fruit  bushes. 

(12)  Protecting  young  fruit  trees. 

(13)  Reclaiming  of  waste  land. 

(14)  Warping  or  weiring  of  land. 

(15)  Embankments  and  sluices  against  floods. 

(16)  The  erection  of  wirework  in  hop  gardens. 

[N.  B. — The  above  are  subject  to  the  provisions  given 
under  the  third  class  of  improvements  with  respect  to  mar- 
ket gardens.] 

314 


LANDLORDS    AND    TENANTS 

The  drainage  of  land  is  put  into  a  class  by  itself. 
It  is  required  that  the  tenant  shall  give  notice  to 
the  landlord  of  his  intention  to  construct  a  drain- 
age system  if  he  is  to  expect  compensation  under 
the  law  for  his  improvement.  This  notice  must 
be  given  not  more  than  three  months  nor  less  than 
two  months  before  the  beginning  of  the  execution 
of  the  work,  and  during  this  time  the  landlord 
may,  if  the  tenant  has  not  in  the  meantime  with- 
drawn the  notice,  "undertake  to  execute  the  im- 
provement himself,  and  may  execute  the  same  in 
any  reasonable  and  proper  manner  which  he 
thinks  fit,  and  charge  the  tenant  with  a  sum  not 
exceeding  five  pounds  per  centum  per  annum  on 
the  outlay  incurred  in  executing  the  improvement, 
or  not  exceeding  such  annual  sum  payable  for 
a  period  of  twenty-five  years  as  will  repay  such 
outlay  in  the  said  period,  with  interest  at  the  rate 
of  three  per  centum  per  annum,  such  annual  sum 
to  be  recoverable  as  rent.  In  default  of  any  such 
....  undertaking,  and  also  in  the  event  of  the 
landlord  failing  to  comply  with  his  undertaking 
within  a  reasonable  time,  the  tenant  may  execute 
the  improvement  himself,  and  shall  in  respect 
thereof  be  entitled  to  compensation"  under  the 
Agricultural  Holdings  Act. 

The  third  class  includes  a  large  number  of 

improvements    for   which   compensation   can   be 

claimed  under  the  law,  without  having  gained  the 

consent  of  the  landlord  or  having  given  notice  to 

315 


AGRICULTURAL    ECONOMICS 

him  previous  to  the  execution  of  such  improve- 
ments. The  list  of  improvements  put  into  this 
class  is  as  follows : 

(18)  Chalking  land. 

(19)  Clay  burning. 

(20)  Claying  of  land,  or  spreading  blaes  upon  land. 

(21)  Liming  of  land. 

(22)  Marling  of  land. 

(23)  Application  to  land  of  purchased  artificial  or  other 
purchased  manure. 

(24)  Consumption  on  the  holding  by  cattle,  sheep,  or 
pigs,  or  by  horses  other  than  those  regularly  employed  on 
the  holding  of  corn,  cake,  or  other  feeding-stuffs  not  pro- 
duced upon  the  holding. 

(25)  Consumption  on  the  holding  by  cattle,  sheep,  or 
pigs,  or  by  horses  other  than  those  regularly  employed  on 
the  holding,  of  corn  proved  by  satisfactory  evidence  to  have 
been  produced  and  consumed  on  the  holding. 

(26)  Laying  down  temporary  pasture  with  clover,  grass, 
lucerne,  sainfoin,  or  other  seeds  sown  more  than  two  years 
prior  to  the  determination  of  the  tenancy. 

(27)  In  the  case  of  market  gardens — 

(i)  Planting  of  standard  or  other  fruit  trees 
permanently  set  out; 

(ii)  Planting  of  fruit  bushes  permanently  set 
out; 

(iii)  Planting  of  strawberry  plants ; 

(iv)  Planting  of  asparagus,  rhubarb,  and  other 
vegetable  crops  which  continue  productive  for  two 
or  more  years ; 

(v)  Erection  or  enlargement  of  buildings  for 
the  purpose  of  the  trade  or  business  of  a  market 
gardener. 

In  ascertaining  the  amount  of  compensation 
payable  to  a  tenant,  account  is  taken  of  any  bene- 
fit which  the  landlord  has  given  or  allowed  to  the 
316 


LANDLORDS    AND    TENANTS 

tenant  for  making  the  improvement.  Also  in 
case  the  tenant  is  under  contract  to  return  a  cer- 
tain amount  of  manure  to  the  soil  each  year,  and 
in  case  such  amount  shall  not  exceed  the  amount 
that  is  produced  from  the  feeds  which  are  pro- 
duced upon  the  holding,  this  amount  is  excluded 
from  the  amount  for  which  compensation  can  be 
claimed. 

In  case  the  landlord  and  the  tenant  fail  to  agree 
as  to  the  amount  of  compensation  which  the  ten- 
ant should  have  for  the  various  improvements 
which  have  been  named  above,  the  difference  is 
settled  by  means  of  arbitration. 

In  case  of  any  breach  of  contract  on  the  part  of 
either  landlord  or  tenant,  damages  may  be  claimed 
by  the  party  injured.  Also  in  case  the  tenant 
causes  or  allows  any  waste,  injures  the  soil,  or 
destroys  the  improvements,  the  landlord  can  make 
a  claim  for  payment  for  such  injuries.  These 
claims  are  arbitrated  the  same  as  those  for  im- 
provements. 

In  case  of  permanent  improvements  such  as  are 
not  mentioned  in  either  of  the  above  classes,  the 
tenant  may  remove  the  improvement  unless  the 
landlord  may  choose  to  buy  the  same,  with  the 
proviso  that  he  repair  any  damages  which  may 
have  been  incurred  by  the  removal  of  the  build- 
ing, that  is  he  must  leave  the  premises  in  as  good 
condition  as  if  the  improvement  had  not  been 
made. 

317 


AGRICULTURAL    ECONOMICS 

It  is  the  usual  thing  for  the  incoming  tenant 
to  pay  the  sum  which  is  due  the  outgoing  tenant 
as  remuneration  for  improvements;  and  in  case 
the  new  tenant  remains  but  a  short  time  on  the 
farm,  so  that  at  the  expiration  of  his  tenancy  he 
has  not  had  time  to  realize  in  full  upon  such  invest- 
ments, he  receives  remuneration  for  such  im- 
provements just  the  same  as  if  he  had  executed 
them  himself. 

These  are  the  essential  points  of  the  Agricul- 
tural Holdings  Act  of  1883  as  modified  by  the 
amending  Act  of  1900.  The  changes  made  by 
the  amending  Act  were  matters  of  detail  meant  to 
meet  certain  objections  to  the  practical  workings 
of  the  original  Act.  This  law,  as  it  now  stands, 
seems  to  supply  the  regulations  necessary  to  an 
amicable  adjustment  of  the  relations  between 
landlord  and  tenant  in  England. 

Tenancy  from  year  to  year  is  the  rule  iri  Eng- 
land to-day,  and  no  question  is  raised  as  to  the 
security  of  the  landlord  or  of  the  tenant.  Either 
party  may  bring  the  tenancy  to  a  close  at  the 
expiration  of  any  year,  by  giving  proper  notice. 
Under  the  act,  twelve  months'  notice  is  required, 
but  by  special  agreement  between  landlord  and 
tenant  the  time  may  be  changed  to  six  months.1 

Written  contracts  are  generally  used,  but  the 

1The  Agricultural  Holdings  Act  as  now  in  force  may  be 
found  in  convenient  form  in  the  Journal  of  the  Royal  Agricul- 
tural Society  of  England,  third  series,  Vol.  XI,  Part  III,  1900. 

318 


LANDLORDS    AND    TENANTS 

leading  agriculturists  of  the  country  agree  that 
such  contracts  should  contain  few  restrictions 
upon  the  methods  of  farming,  except  that  the 
farm  shall  be  operated  in  accordance  with  the 
rules  of  good  husbandry.  Many  of  the  written 
agreements  now  in  use  would,  if  strictly  enforced, 
bind  the  tenants  hand  and  foot ;  but  as  a  matter  of 
fact  many  of  these  covenants  are  recognized  to 
be  obsolete  and  others  are  "winked  at"  by  the 
landlords.  A  study  of  the  written  agreements 
nominally  in  force  at  the  present  time  would,  in 
themselves,  give  a  very  erroneous  idea  of  the 
actual  relations  between  landlords  and  tenants. 

The  farmers  and  the  landlords  of  England  have 
quite  generally  come  to  recognize  that  liberty  and 
honesty  are  essential  to  success  in  agriculture. 
The  writer  gradually  gained  the  impression  by 
coming  in  personal  contact  with  farmers  and  land- 
lords, or  more  often  the  agents  of  the  latter,  that 
accompanying  the  gradual  perfecting  of  the  Ag- 
ricultural Holdings  Act,  there  has  been  the 
growth  of  a  sense  of  justice  in  the  minds  of  both 
the  landlords  and  the  tenants.  This  sense  of  jus- 
tice is  all  the  more  effective  because  it  is  accom- 
panied by  the  belief  that  in  farm  management, 
whatever  is  beneficial  to  the  farmer  is  likewise 
advantageous  to  the  landlord. 

The  English  method  of  regulating  the  relations 
between  landlord  and  tenant  is  successful  through- 
out Great  Britain.  The  history  of  land  tenure  in 

319 


AGRICULTURAL    ECONOMICS 

Scotland  would  prove  very  interesting  and  help- 
ful. Leases  of  long  duration,  most  commonly 
for  nineteen  or  for  twenty-one  years,  have  been  in 
general  use  in  Scotland  for  more  than  a  century. 
The  system  of  "corn  rents,"  already  referred  to, 
proved  an  effective  means  of  adjusting  rents  to 
prices  at  the  time  when  this  problem  was  prov- 
ing disastrous  to  the  long  term  lease  in  England. 
At  the  present  time  the  Agricultural  Holdings 
Act  of  Scotland  is  practically  the  same  as  that  in 
force  in  England.  While  it  continues  to  be  the 
custom  among  Scottish  landlords  and  tenants  to 
have  long  term  leases  drawn,  it  has  become  the 
common  thing  to  include  a  clause  which  makes 
it  possible  for  either  the  landlord  or  the  tenant  to 
bring  the  tenancy  to  a  close  at  certain  periods,  as 
for  example,  at  the  end  of  the  fifth,  tenth  or  fif- 
teenth year,  or  at  the  end  of  the  second,  fourth, 
sixth,  etc.,  year,  by  giving  proper  notice  to  the 
other  party.  In  effect,  therefore,  the  long  term 
lease  is  passing  away,  for  the  same  object  is  now 
attained  through  the  Agricultural  Holdings  Act. 
In  another  connection  the  writer  had  occasion 
to  publish  the  statement  that,  "the  relation  be- 
tween landlord  and  tenant  is  very  satisfactorily 
arranged,  the  farmers  are,  as  a  rule,  contented 
with  the  present  system,  and  the  fields  of  England 
prove  that  landownership  on  the  part  of  farmers 
is  not  essential  to  good  agriculture."  This  state- 
ment has  occasioned  surprise  on  the  part  of  some 
320 


LANDLORDS    AND    TENANTS 

American  readers,  but  an  eminent  agriculturist 
of  Great  Britain,  Mr.  John  Speir,  says  this  state- 
ment "expresses  briefly  and  concisely  the  position 
here."  The  writer  had  no  thought  of  minimiz- 
ing the  importance  of  landownership  on  the  part 
of  farmers,  but  rather  to  emphasize  that  in  spite 
of  the  fact  that  tenancy  is  the  rule  in  that  country, 
the  agriculture  of  England  is,  in  many  ways, 
worthy  of  our  emulation,  and  that  this  advanced 
position  of  English  agriculture  is  due,  in  a  great 
measure,  to  an  excellent  system  of  adjusting  the 
relations  between  landlord  and  tenant. 

That  Americans  may  profit  by  the  experience 
of  their  British  cousins,  should  be  evident  from 
the  foregoing  pages.  That  they  will  be  willing  to 
draw  upon  the  experience  of  the  English,  will 
scarcely  be  questioned.  The  Americans  have  be- 
come independent  in  thought  and  action,  and  have 
become  leaders  in  nearly  every  line  to  which  they 
have  turned  their  attention,  yet  they  have  always 
been  willing  to  accept  all  that  is  of  value  in  the 
achievements  of  other  countries,  and  we  believe 
that  as  America  has  profited  by  the  experience  of 
the  English  in  the  development  of  factory  legisla- 
tion, so  will  she  profit  by  a  study  of  the  English 
agrarian  legislation. 


31 


AGRICULTURAL    ECONOMICS 
APPENDIX  TO  CHAPTER  XIII 

COVENANTS    FOUND   IN    NORFOLK    FARM    LEASES,   BY    W. 
MARSHALL 

[The  following  description  of  the  Norfolk  leases  is  taken 
from  the  second  edition  of  William   Marshall's  Rural 
Economy  of  Norfolk  (1795),  PP-  70  to  80.] 
The  following  heads  of  a  lease  will  place  the  general 
management  of  a  Norfolk  estate  in  a  clear  and  comprehen- 
sive point  of  view.     They  are  not,  either  in  form  or  sub- 
stance, copied,  precisely,  from  the  lease  in  use  upon  any 
particular  estate;  but  exhibit,  I  believe,  a  pretty  faithful 
outline  of  the  modern  Norfolk  lease. 

Landlord  agrees,  i.  To  let  certain  specified  premises, 
for  a  term  and  at  a  rent,  previously  agreed  upon. 

2.  Also  to  put  the  buildings,  gates,  and  fences  in  tenant- 
able  repair. 

3.  Also  to   furnish  rough  materials,  and  pay  half  the 
workmen's  wages  in  keeping  them  in  repair,  during  the 
term  of  the  demise ;  willful  or  negligent  damage  excepted. 

4.  Also  to  furnish   the  premises  with  such  ladders  as 
may  be  wanted  in  doing  repairs,  or  in  preserving  the  build- 
ings, in  case  of  high  winds,  fire  in  chimneys,  etc.  (an  excel- 
lent clause). 

5.  Also  to  furnish  rough  materials  for  keeping  the  gates, 
gate-posts,  styles,  etc.,  etc.,  in  repair;  or  to  furnish  the  ma- 
terials ready  cut  out ;  tenant  paying  the  usual  price  of  labor 
for  cutting  out. 

6.  Also  to  pay  half  the   expense  of  such  shores  and 
ditches  as  he,  or  his  agent,  shall  direct  to  be  made  or  re- 
newed. 

Landlord  reserves,  I.  All  minerals,  fossils,  marls,  clays; 
with  liberty  to  work  mines,  quarries  and  pits,  and  to  burn 
lime  and  bricks  upon  the  premises ;  likewise  to  carry  away 
such  minerals,  etc.,  etc.;  excepting  such  marl,  or  clay,  as 
may  be  wanted  for  the  improvement  of  the  farm. 

2.  Also,  all  timber  trees,  and  other  trees  and  woods, 
underwood  and  hedgewood;  with  liberty  to  fell,  convert, 
322 


LANDLORDS    AND    TENANTS 

char,  and  carry  off  such  timber  or  other  woods;  excepting 
such  thorns  and  bushes  as  shall  be  set  out  by  landlord,  for 
making  and  repairing  fences;  provided  the  thorns,  etc.,  so 
set  out  be  cut  in  the  winter  months;  excepting,  however, 
out  of  this  proviso,  such  few  as  may  be  wanted  in  the  course 
of  the  summer  months,  for  stopping  accidental  gaps. 

3.  Also,  full  liberty  of  planting  timber  trees  in  hedges,  or 
on  hedgebanks;   with   a  power  to  take  to  himself,   after 
twelve  months'  notice  given,  some  certain  number  of  acres 
of  land  for  the  purpose  of  raising  timber  trees,  other  trees, 
or  underwood;  allowing  the  tenant  such  yearly  rent,  etc., 
for  the  land  so  taken,  as  two  arbitrators  shall  fix. 

4.  Also,  a  power  of  altering  roads,  and  of  inclosing  com- 
mons, or  waste  lands,  without  the  control  of  the  tenant;  to 
which    intent,    all    common-right    is    usually    reserved,    in 
form,  though  seldom  in  effect,  to  the  landlord. 

5.  Also,  the  customary  liberty  to  view  the  buildings,  do 
repairs,  and,  consequently,  to  bring  and  lay  materials. 

6.  Lastly,  the  right  of  sporting  and  destroying  vermin. 
Tenant  agrees,  I.  To  pay  the  stipulated  rent  half-yearly ; 

and  within  thirty  days  after  it  be  due ;  under  forfeiture  of 
the  lease;  and  further,  to  pay  the  last  half-year's  rent  two 
months,  or  a  longer  time,  before  the  expiration  of  the  term. 

2.  Also,  to  do  all  carriage  for  repairs  (within  a  specified 
distance)  ;  and  to  find  all  iron-work  and  nails ;  and  to  fur- 
nish wheat-straw  for  thatching;  and  to  pay  half  the  work- 
men's wages,  and  find  them  with  small  beer. 

3.  Also,  to  do  all  ditching,  etc.,  set  out  by  landlord  (pro- 
vided the  quantity  set  out  do  not  exceed  one-tenth  of  the 
whole)  ;  and  to  pay  half  the  workmen's  wages,  and  find  them 
in  small  beer ;  and  to  defend  with  hurdles,  or  otherwise,  all 
such  young  hedges  as  shall  be  exposed,  in  spring  and  sum- 
mer, to  the  browsings  of  pasturing  stock. 

4.  Also,  to  make,  or  pay  for  making,  such  gates,  etc.,  as 
shall  be  wanted  upon  the  farm  during  the  term  of  the  de- 
mise ;  and  to  hew,  or  to  pay  for  hewing,  all  necessary  gate- 
posts ;  and  to  put  down  and  hang,  in  a  workman-like  man- 
ner, such  gates  and  gateposts  at  his  own  sole  expense;  as 

323 


AGRICULTURAL    ECONOMICS 

well  as  keep  all  the  old  gates  on  the  premises  in  tenantable 
repair. 

5.  Also,  not  to  assign  over,  nor  in  any  other  way,  part 
with  possession  of  his  farm;  but  to  make  it  his  constant 
residence  during  the  term  of  the  lease.     Nor  to  take  any 
other  farm;  nor  to  purchase  any  lands  adjoining,  or  inter- 
mixed with  it ;  without  the  license  and  consent  of  landlord ; 
under  forfeiture  of  the  lease. 

6.  Also,  not  to  break  up  any  meadow,  pasture,  or  furze 
ground,  under  the  penalty  of  ten  pounds  an  acre  a  year. 
Nor  to  cut  "flags,"  that  is,  turves,  under  fifty  shillings  a 
hundred. 

7.  Also,  not  to  lop  or  top  any  timber  tree,  under  the 
penalty  of  twenty  pounds ;  nor  other  tree,  under  ten  pounds ; 
nor  cut  underwood  or  hedgewood   (except  as  before  ex- 
cepted)  under  ten  pounds  a  load.     But,  on  the  contrary,  to 
preserve  them  from  damage  as  much  as  may  be;  and.  if 
damaged  by  others,  to  give  every  information  in  his  power 
under  the  penalty  of  twenty  pounds. 

8.  Also,  not  to  take  more  than  two  crops  of  corn  with- 
out a  whole  year's  fallow, — a  crop  of  turnips  twice  hoed, — 
or  a  two  years'  lay, — intervening,  under  the  penalty  of 

9.  Also,  to  consume  on  the  premises  all  hay,  straw,  and 
other  stover;  and  not  to  carry  off,  or  suffer  to  be  carried 
off,  any  part,  under  pretense  of  being  tithe  compounded  for, 
or  under  any  other  pretense  whatever,  under  the  penalty  of 
ten  pounds,  for  every  load  carried  off 

10.  Nor  to  carry  off,  nor  to  suffer  to  be  carried  off,  any 
dung,  muck,  etc.,  under  five  pounds  a  load. 

11.  Nor    to    impair   the    foundations    of    the   buildings 
round  the  dungyard,  by  scooping  out  the  bottom  of  the 
yard  too  near  the  buildings;  but  to  keep  up  a  pathway 
three  feet  wide  between  the  dungpit  and  the  foundations 
(an  excellent  clause). 

12.  Also,  not  to  stock  any  part  of  the  premises  with  rab- 
bits ;  but  to  endeavor,  as  much  as  may  be  to  destroy  them. 

13.  Also,  during  the  last  two  years  of  the  lease,  not  to 
take  in  any  agistment  stock. 

324 


LANDLORDS    AND    TENANTS 

14.  Also,  in  the  last  year,  not  to  suffer  swine  to  go  loose 
without  being  yoked  and  rung. 

15.  Also,  in  the  last  year,  to  permit  landlord,  or  incom- 
ing tenant  to  sow  grass  seeds  over  the  summer  corn ;  and 
to  harrow  them  in,  gratis;  and  not  to  feed  off  the  young 
grasses  after  harvest. 

16.  Also,  in  the  last  year,  not  to  sow  less  than  

acres  of  fallow,  of,  at  least,  three  plowings  and  suitable  har- 
rowings,  with  two  pints  an  acre  of  good,  marketable,  white- 
loaf  turnip  seed;  and,  in  due  time,  to  give  the  plants  two 
hoeings  (or,  if  the  crop  miss,  to  give  the  fallow  two  extra 
plowings}   in  a  husbandlike  manner;   and,  at  the  expira- 
tion of  the  term,  to  leave  such  turnips  growing  on  the  prem- 
ises;   free    from   wilful    or   neglectful    injury;    under   the 
penalty  of pounds  an  acre. 

17.  Also,  to  permit  the  landlord  or  incoming  tenant  to 
begin,  on  or  after  the  first  day  of  July,  in  the  last  year,  to 
break  up  the  two  years'  lay  (hereafter  agreed  to  be  left) 
for  wheat  fallow,  or  any  other  purpose ;  and  to  harrow, 
stir,  and  work  the  said  fallows;  and  to  carry  and  spread 
dung  or  other  manure  thereon,  without  molestation. 

18.  Also,  in  the  last  year,  to  permit  landlord,  or  incom- 
ing tenant,  to  lay  up  hay,  or  other  fodder,  on  the  premises, 
and  to  protect  it  thereon. 

19.  Also,  to  lay  up  and  leave  upon  the  premises,  at 
the  expiration  of  the  lease,  all  the  hay  of  the  last  year  (or 
of  any  preceding  year,  if  unconsumed  at  the  expiration  of 

the  term)  except loads,  which  tenant  is  allowed  to 

carry  off. 

20.  Also,  to  lay  up,  in  the  usual  barns  and  rickyards,  the 
last  year's  crops  of  corn;  together  with  the  tithe,  if  com- 
pounded for ;  and  to  thresh  them  out  in  proper  season ;  and 
in  such  manner  that  the  straw,  chaff,  and  colder  shall  be 
injured  as  little  as  may  be. 

21.  Also,  at  the  expiration  of  the  term,  to  leave  no  less 
than    acres  of  olland    [meadow-land,   literally  old- 
land],  of  two  years  laying  (including  that  which  may  have 
been  broken  up  by  landlord  or  incoming  tenant)  and  which 
shall  have  been  laid  down  in  a  husbandlike  manner,  after 

325 


AGRICULTURAL    ECONOMICS 

turnips  or  a  summer  fallow,  with  not  less  than  twelve 
pounds  of  clover,  and  half  a  peck  of  ray  grass,  seeds  an 

acre   under  the  penalty  of   pound  an  acre. 

Also  not  less  than acres  of  olland,  of  one  year  s  lay- 
ing, to  be  laid  down  as  above  specified,  under  the  penalty 
of pound  an  acre. 

22.  Also,  at  the  expiration  of  the  term,  to  leave  all  the 
yard  manure,  produced  in  the  last  year  of  the  lease,  piled 
up  in  a  husbandlike  manner,  on  the  premises;  excepting 
such  part  of  it  as  may  have  been  used  for  the  turnip  crop ; 
and  excepting  such  other  part  as  may  have  been  used  by 
landlord,  or  incoming  tenant,  for  wheat. 

23.  Also,  at  the  expiration  of  the   term,  to  leave  the 
buildings,   ladders,  gates,   fences,  water-courses,   etc.,  etc., 
in  good  and  tenantable  repair;  landlord  in  this,  as  in  every 
other  case,  performing  his  part  as  above  agreed  to.    Also, 
upon  such  parts  of  an  estate  as  lie  near  the  residence  of  the 
owner,  it  is  customary  for  the  tenant  to  agree  to  furnish  an- 
nually, a  certain  number  of  loads  of  straw,  according  to  the 
size  of  his  farm ;  also  to  do  the  carriage  of  a  certain  num- 
ber of  loads  of  coal;  also  to  keep  dogs,  warn  off  sports- 
men, and  suffer  them  to  be  prosecuted  in  his  name :  rem- 
nants, these,  of  the  ancient  base  tenures  of  soccage  and 
villanage. 

Tenant  to  be  alloived,  i.  The  full  value  of  all  the  hay 
left  upon  the  premises,  of  the  last  year's  growth,  or  of  the 
growth  of  any  preceding  year ;  provided  the  quantity  of  old 
hay  do  not  exceed loads. 

2.  Also,  the  full  value  of  the  turnips  left  on  the  prem- 
ises ;  or  the  accustomed  price  for  the  plowings,  harrowings, 
and  manuring;  at  his  own  option. 

3.  Also,  the  feedage  of  the  lays  broken  up,  by  the  land- 
lord, or  the  incoming  tenant,  from  the  time  of  their  being 
broken   up   until   the   expiration   of  the   term   the  ensuing 
Michaelmas;  also,  for  all  damage  arising  in  carrying  on 
manure  or  otherwise. 

4.  Also,  the  feedage  of  the  young  clovers,  from  harvest 
to  Michaelmas. 

326 


LANDLORDS    AND    TENANTS 

5.  Also,  the  use  of  the  barns  and  rickyards  for  summer 
corn  until  Mayday;  and  for  winter  corn  until  the  first  of 
July  next  ensuing. 

6.  Also,  (by  way  of  a  consideration  for  the  stover)  the 
customary  price  for  threshing  and  dressing  the  corn;  the 
landlord,  or  incoming  tenant,  also  carrying  the  same  to 
market,  gratis :  provided  the  distance  required  to  be  carried 

does  not  exceed miles,  and  the  quantity  required  to 

be  carried,  at  one  journey,  be  not  less  than coombs. 

[A  coomb  is  equivalent  to  four  bushels.] 

All  the  above  allowances  to  be  referred  to  two  arbitra- 
tors ;  one  to  be  chosen  by  each  party,  in  Michaelmas  week ; 
and  the  amount  awarded  to  be  immediately  paid  down  by 
the  landlord,  or  the  incoming  tenant 


'TPHE  following  pages  contain  ad- 
vertisements  of  a  few  of  the 
Macmillan  books  on  kindred  subjects 


The  Most  Recent  Additions  to  the  CITIZEN'S  LIBRARY 


Great  Cities  in  America 

By  DELOS  F.  WILCOX,  Author  of  "The  American  City" 

Dr.  Wilcox's  forthcoming  book  differs  from  most  works  on  this 
subject  in  that  it  is  practical  and  concrete,  rather  than  critical  and 
theoretical.  It  embodies  a  careful  first-hand  investigation  of  ad- 
ministration in  a  number  of  typical  cities  —  Washington,  New  York, 
Chicago,  Philadelphia,  St.  Louis,  and  Boston.  It  brings  to  the  stu- 
dent's desk  a  great  amount  of  statistical  and  statutory  matter  for 
which  otherwise  he  would  have  to  make  difficult  search.  It  ex- 
poses, in  short,  the  actual  workings  of  the  municipal  government  in 
American  cities  in  a  way  that  every  scholar  should  appreciate. 

Cloth,  leather  back,  izmo,  $f.2j  net 

Wage-Earning  Women 

By  ANNIE  MARION  MACLEAN 

Professor  of  Sociology  in  Adelphi  College 

Quite  recently  the  National  Board  of  Young  Women's  Chris- 
tian Associations  of  the  United  States  conducted  an  investigation 
throughout  the  entire  country  of  the  status  of  women  in  the  most 
important  industries.  Its  results  are  incorporated  in  this  book. 

"This  book  needed  to  be  written.  Society  has  to  be  reminded 
that  the  prime  function  of  women  must  ever  be  the  perpetuation  of 
the  race.  It  can  be  so  reminded  only  by  a  startling  presentation  of 
the  woman  who  is  'speeded  up'  on  a  machine,  the  woman  who 
breaks  records  in  packing  prunes  or  picking  hops,  the  woman  who 
outdoes  all  others  in  vamping  shoes  or  spooling  cotton.  .  .  .  The 
chapters  give  glimpses  of  women  wage-earners  as  they  toil  in  dif- 
ferent parts  of  the  country.  The  author  visited  the  shoeshops,  and 
the  paper,  cotton,  and  woolen  mills  of  New  England,  the  department 
stores  of  Chicago,  the  garment-makers'  homes  in  New  York,  the 
silk  mills  and  potteries  of  New  Jersey,  the  fruit  farms  of  California, 
the  coal  fields  of  Pennsylvania,  and  the  hop  industries  of  Oregon. 
The  author  calls  for  legislation  regardless  of  constitutional  quibble, 
for  a  shorter  work-day,  a  higher  wage,  the  establishment  of  resi- 
dential clubs,  the  closer  cooperation  between  existing  organizations 
for  industrial  betterment."  —  Boston  Advertiser. 

Cloth,  leather  back,  izmo,  $J.2J  net 


THE  CITIZEN'S  LIBRARY  OF  ECONOMICS,  POLITICS,  AND  SOCIOLOGY 
is  edited  by  Richard  T.  Ely,  Professor  of  Political  Economy  at 
the  University  of  Wisconsin.  For  a  complete  list  of  the  volumes 
included  in  the  series,  address 

THE    MACMILLAN    COMPANY 

64-66  Fifth  Avenue,  New  York 


AMERICAN  SOCIAL  PROGRESS  SERIES 

Edited  by  SAMUEL  McCuNE  LINDSAY,  PH.D. 


A  series  of  handbooks  for  the  student  and  general  reader,  giving  the 
results  of  the  newer  social  thought  and  of  recent  scientific  investigations 
of  the  facts  of  American  social  life  and  institutions.  Each  volume  about 
200  pages.  

1.  The  New  Basis  of   Civilization.     By  Professor  S.  N.  PATTEN, 

Ph.D.,  LL.D.,  University  of  Pennsylvania.  $1.00  net 

The  new  American  Social  Progress  Series,  which  The  Macmillan 
Company  is  bringing  out  under  the  editorship  of  Professor  Sam- 
uel McCune  Lindsay,  has  been  admirably  launched  with  Pro- 
fessor Patten's  book,  "The  New  Basis  of  Civilization."  A  well- 
known  writer  on  economics  has  characterized  it  as  "the  book 
we  have  been  waiting  for  to  put  social  work  on  the  basis  of  a 
well-reasoned  philosophy." 

2.  Standards  of  Public  Morality.    By  ARTHUR  TWINING  HADLEY, 

PH.D.,  LL.D.,  President  of  Yale  University.  $1.00  net 

This  is  a  subject  on  which  President  Hadley  has  already  spoken 
with  conspicuous  wisdom,  and  no  man  in  America  is  better  fitted 
to  discuss  it  adequately.  The  events  of  the  past  two  or  three 
years  have  made  this  topic  one  of  general  interest,  and  Presi- 
dent Hadley's  treatment  of  it  will  be  found  full  of  suggestive 
and  stimulating  thought. 

3.  Governmental  Action  for  Social  Welfare.    By  Professor  JERE- 

MIAH W.  JENKS,  PH.D.,  LL.D.,  Cornell  University.      $f.oo  net 

The  book  presents  a  great  deal  of  information  and  comment 
which  the  average  citizen  should  possess,  and  is  written  in  Pro- 
fessor Jenks's  shrewd,  practical,  and  readable  style. 

4.  Misery  and  Its  Causes.    By  EDWARD  T.  DEVINE,  PH.D.,  LL.D., 

Columbia  University.  $/.^5"  net 

Poverty  and  Maladjustment.  Out  of  Work.  Out  of  Health. 
Out  of  Friends.  The  Justice  and  Prosperity  of  the  Future. 


PUBLISHED    BY 

THE   MACMILLAN   COMPANY 

64-66  Fifth  Avenue,  New  York 


Some  Ethical   Gains  through  Legislation 
By  FLORENCE  KELLEY 

Secretary  of  the  National  Consumers'  League 

This  interesting  volume  is  by  one  who  knows  and  sympathizes  with 
the  abject  poverty  to  be  found  in  certain  sections  of  the  country. 

It  has  grown  out  of  the  author's  experience  in  philanthropic  work 
in  Chicago  and  New  York,  and  her  service  for  the  State  of  Illinois 
and  for  the  Federal  Government  in  investigating  the  circumstances 
of  the  poorer  classes,  and  conditions  in  various  trades. 

The  value  of  the  work  lies  in  information  gathered  at  close  range 
/n  a  long  association  with,  and  effort  to  improve  the  condition  of, 
the  very  poor. 

Cloth    Leather  back     i2mo     $1.25  net 

Studies  in  the  Evolution  of  Industrial  Society 
By  RICHARD  T.  ELY,  Ph.D.,  LL.D. 

University  of  Wisconsin 

Professor  Ely  discusses  in  a  straightforward  way  the  progress  of 
the  working  classes,  the  changes  in  their  condition,  their  tendencies 
toward  better  and  brighter  things,  and  the  effect  of  these  tendencies 
on  society  generally.  The  benefit  of  competition  and  the  improve- 
ment of  the  race,  municipal  ownership  and  concentration  of  wealth, 
are  treated  in  a  sane,  helpful,  and  interesting  manner. 

Cloth    Leather  back    $1.25  net 

Education  and  Industrial  Evolution 
By  FRANK  T.  CARLTON,  Ph.D. 

Professor  of  Economics  and  History  in  Albion  College 

The  importance  of  general  educational  advance  to  industrial 
progress  and  the  necessity  for  manual  training  as  a  means  of  de- 
velopment among  the  working  classes,  are  subjects  of  the  greatest 
general  interest  to-day.  Professor  Carlton  is  probably  one  of  the 
best  equipped  men  in  the  country  to  handle  this  subject  clearly 
and  dwells  especially  on  the  importance  of  a  broader  industrial 
education. 

Cloth    Leather  back    $1.25  net 


PUBLISHED    BY 

THE   MACMILLAN   COMPANY 

64-66  Fifth  Avenue,  New  York 


By  JANE  ADDAMS 

The  Newer  Ideals  of  Peace 

Miss  Addams  points  out  that  in  the  growth  of  the  moral  sense  of 
the  nations  the  goal  of  universal  peace  will  be  reached  through  the 
cooperation  of  the  very  elements  now  regarded  as  disturbers  —  the 
immigrant  population  in  the  large  cities.  She  discusses  the  Labor 
Movement ;  the  Protection  of  Women  and  Children  ;  "  Women  in 
City  Government,"  etc. 

The  editor  of  Collier's  writes :  "  To  us  it  seems  the  most  compre- 
hensive talk  yet  given  about  how  to  help  humanity  in  America 
to-day." 

"A  clean  and  consistent  setting  forth  of  the  utility  of  labor  as 
against  the  waste  of  war,  and  an  exposition  of  the  alteration  of 
standards  that  must  ensue  when  labor  and  the  spirit  of  militarism 
are  relegated  to  their  right  places  in  the  minds  of  men.  .  .  .  Back 
of  it  lies  illimitable  sympathy,  immeasurable  pity,  a  spirit  as  free  as 
that  of  St.  Francis,  a  sense  of  social  order  and  ritness  that  Marcus 
Aurelius  might  have  found  similar  to  his  own."  —  Chicago  Tribune. 

Cloth    i2tno    Leather  back     $1.25  net 


Democracy  and  Social   Ethics 

"  Its  pages  are  remarkably  —  we  were  about  to  say  refreshingly — 
free  from  the  customary  academic  limitations  .  .  .;  in  fact,  are  the 
result  of  actual  experience  in  hand-to-hand  contact  with  social 
problems.  .  .  .  No  more  truthful  description,  for  example,  of  the 
'boss'  as  he  thrives  to-day  in  our  great  cities  has  ever  been  written 
than  is  contained  in  Miss  Addams's  chapter  on  '  Political  Reform.' 
.  .  .  The  same  thing  may  be  said  of  the  book  in  regard  to  the 
presentation  of  social  and  economic  facts."  —  Review  of  Reviews. 

"Too  much  emphasis  cannot  be  laid  upon  the  efficiency  and  in- 
spiration afforded  by  these  essays.  .  .  .  The  book  is  startling, 
stimulating,  and  intelligent." — Philadelphia  Ledger. 

Cloth     i2mo    Leather  back    $1.25  net 


Twenty  Years  at  Hull  House 

Ready  in   October,  1910 


PUBLISHED    BY 

THE   MACMILLAN   COMPANY 

64-66  Fifth  Avenue,  New  York 


UNIVERSITY  OF  CALIFORNIA  LIBRA 
This  book  is  DUE  on  the  last  date  stamped  be 


OCT  14   1941 


MAY    II   IS 
REC'D  LD 

JUNb    1959 


LD  21-100m-12,'46(A2012sl6)4120 


YD 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


